Client Login
 

(703) 992-9570  

plan@makonnenfg.com

Home NavigationMENU
  • Who We Are 
    • Our Firm
    • Meet the Team
    • Our Mission and Philosophy
    • Why MFG and LPL Financial
    • Strategic Resources
  • The Planning Process 
    • What We Do
    • The Planning Process
    • Forms & Planning Documents
  • Events
  • Resources 
    • Retirement
    • Estate
    • Investment
    • Tax
    • Money
    • Lifestyle
    • Glossary
    • Tax Resources
  • WealthVision
  • Contact
Tax Read Time: 3 min

You May Need to Make Estimated Tax Payments If…

You may have to make estimated tax payments if you earn income that is not subject to withholding, such as income from self-employment, interest, dividends, alimony, rent, realized investment gains, prizes, and awards.

You also may have to pay estimated taxes if your income tax withholding on salary, pension, or other income is not enough, or if you had a tax liability for the prior year. Please consult a professional with tax expertise regarding your individual situation.1

How to Pay Estimated Taxes

If you are filing as a sole proprietor, a partner, an S corporation shareholder, and/or a self-employed individual and expect to owe taxes of $1,000 or more when you file a return, you should use Form 1040-ES, Estimated Tax for Individuals, to calculate and pay your estimated tax. You may pay estimated taxes either online, by phone, or through the mail.2

How to Figure Estimated Tax

To calculate your estimated tax, you must include your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. Consider using your prior year's federal tax return as a guide.

When to Pay Estimated Taxes

For estimated tax purposes, the year is divided into four payment periods, each with a specific payment due date. If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty, even if you are due a refund when you file your income tax return.

Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in taxes after subtracting their withholdings and credits. They may also avoid the penalty if they paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.2

1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
2. IRS.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

Preparation is the Key to Retirement

Preparation is the Key to Retirement

The simplest ideas can sometimes make a massive difference over time. Enjoy this brief video to learn more.

Understanding the Alternate Valuation Date

Understanding the Alternate Valuation Date

Executors can value the estate on the date of death, or on its six-month anniversary —the “Alternate Valuation Date."

How to Appeal Your Property Taxes

How to Appeal Your Property Taxes

For homeowners who think their property taxes are too high, there are ways to appeal.

 

Have A Question About This Topic?









Thank you! Oops!
 

Get Financial News & Updates Delivered to Your Inbox





Thank you!

Error processing your request. Please try again at a later time.

Check the background of your financial professional on FINRA's BrokerCheck.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

We take protecting your data and privacy very seriously. As of January 1, 2020 the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal information.

Copyright 2023 FMG Suite.


The LPL Financial registered representative(s) associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA & SIPC.

Registered as IAR in the following states: TX and VA.

Contact

Makonnen Financial Group, LLC
Office: 703-992-9570
Toll-Free: 800-877-7210
Fax: 703-992-9945

5568 General Washington Drive
Suite A-200
Alexandria, VA 22312

plan@makonnenfg.com

Facebook Twitter LinkedIn

Quick Links

  • Retirement
  • Investment
  • Estate
  • Tax
  • Money
  • Lifestyle
  • All Articles
  • All Videos
  • All Calculators
  • All Presentations