ASK MICKEY, CPA
Question: Who needs to pay the September 15th Tax deadline?
Answer: Individuals, including the self-employed, investors, retirees, partners, and S corporation shareholders. These groups generally make quarterly estimated tax estimates if they expect to owe $1,000 + when their tax return is filed. Taxpayers with income not subject to withholding, including interest, dividends, capital gains, rental income and alimony, normally make estimated tax payments.
If a taxpayer underpaid their taxes, they may have to pay a penalty. This applies whether they paid through withholding or through estimated tax payments. A penalty may also apply for late estimated tax payments even if someone is due a refund when they file their tax return.
In general, taxpayers don’t have to pay a penalty if they meet any of these conditions:
If they owe less than $1,000 in tax with their tax return, or throughout the year, they pay the smaller of these two amounts. At least 90% of the tax for the current year or100% of the tax shown on their tax return for the prior year. This can increase to 110% based on adjusted gross income
Taxpayers should use Form 2210. The IRS may waive the penalty if someone underpaid because of unusual circumstances and not willful neglect.
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