Don't Delay, Call Today!

Paying Income Taxes and Estimated Taxes

The tax season is almost ending, and there are four ways to pay your personal income taxes. For convenience and efficiency, these are the available options for paying your personal taxes:

 

  • Send in a check for taxes owed (always send checks, not cash, certified mail) Yes, someone else can pay your taxes for you as well. Often taxpayers find themselves short of money on tax day, and need a loan to pay taxes owed. Be sure to list the social security number and the tax period that the payment is to be applied to. If you do not, then the IRS or State Department of Revenue or Franchise Tax Board can assign the payment to the period they want to, and this could increase penalties and interest if there are other year’s taxes owed as well.

 

  • Pay your taxes in person (most local IRS offices will accept payments form taxpayers in person)

 

  • Pay your taxes by credit card (there is a credit card fee and IRS fee for this method)

 

  • Enter into an installment plan with the Internal Revenue Service The Internal Revenue Service has changed the installment plan agreement structure for people who owe income taxes.  Previously, if one owed $10,000 or less, you could file a form 9465 and would be allowed three years to pay what was owed including interest that compounds daily plus a one-time service fee.  Now, the limit is increased to $50,000      for any outstanding taxes owed, and the setup fee has increased.  Therefore, if you owe up to $50,000 you will be able to file a form 9465 and inform the IRS as to what date the tax bill will be paid and what amount.       As long as the payment is made within five years of the beginning date of the plan, the IRS is required to accept the plan under the new Regulations.  However, if more than $50,000 is owed, a form 9465 and a financial statement disclosure form 433A for personal assets and a form 433B if a business is owned is required.

 

You must also agree to keep current on tax filings and future tax payments for the next 5 years as well. This plan is for ONE year only. It is not meant to be used for year after year, and the IRS will terminate the plan after you start it if you do not pay future taxes on time while you have the installment plan in place. Which means you will have start over again and pay the fees again to re-instate the new plan. (Form 9465 allows you five years to pay taxes. It will require a setup fee, and daily interest is compounded. Both businesses and individuals are allowed to set up payment plans.)

 

  • Have the money automatically withdrawn from your bank account or debit (On your personal tax return, list banking account information, routing number, and checking or saving account number for automatic withdrawal.)

 

  • Many states allow the same opportunities, (in person payments, mailing checks, payment plans, credit cards, automatic withdrawals from checking or saving accounts.) Check with your state for local rules

 

Further, if you don’t have taxes withheld from your pay, or you don’t have enough tax withheld, then you may need to make estimated tax payments. If you’re self-employed you normally have to pay your taxes this way.

 

Here are six tips you should know about estimated taxes:

 

1. You should pay estimated taxes in 2014 if you expect to owe $1,000 or more when you file your federal tax return. Special rules apply to farmers and fishermen.

 

2. Estimate the amount of income you expect to receive for the year to determine the amount of taxes you may owe. Make sure that you take into account any tax deductions and credits that you will be eligible to claim. Life changes during the year, such as a change in marital status or the birth of a child, can affect your taxes.

 

3. You normally make estimated tax payments four times a year. The dates that apply to most people are April 15, June 16 and Sept. 15 in 2014, and Jan. 15, 2015.

 

4. You may pay online or by phone. You may also pay by check or money order, or by credit or debit card. If you mail your payments to the IRS, use the payment vouchers that come with Form 1040-ES, Estimated Tax for Individuals.

 

 

Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331.

 

 

 

0 Comments

Leave A Reply





Skip to toolbar