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:
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.)
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.