I hate to be a nag (actually, I tell my husband I'm just detail-oriented!), but if you pay estimated taxes make sure you don't miss the June 15 deadline for the second filing of 2010.
These four extra payments a year are made by folks who get money that isn't subject to payroll withholding. It could be from self-employment, either as your main job or as a sideline to earn a few bucks.
Whatever the cause of your estimated tax obligation, be sure to make the payments. If you don't, or you don't pay in enough (combined payroll withholding and estimated payments), you could end up owing penalties and interest on late or underpaid taxes.
The key is to know when the IRS wants the money.
Uncle Sam prefers you start each tax year by making a good estimate of how much money you expect to owe estimated taxes on. Then using the 1040ES work sheet, figure out the total tax amount and send in a quarter of that money four times a year.
It's often referred to as quarterly payments, but the IRS doesn't use the same calendar you and I do. Here's its payment schedule:
- For income received from Jan. 1 through March 31, the estimated tax payment is due April 15.
- For income received from April 1 through May 31, the estimated tax payment is due June 15.
- For income received from June 1 through Aug. 31, the estimated tax payment is due Sept. 15.
- For income received from Sept. 1 through Dec. 31, the estimated tax payment is due Jan. 15 of the next tax year.
The good news is that estimated deadlines follow the same IRS rules when it comes to a due date on a Saturday, Sunday or legal holiday; you have until the next business day to make the payment.
Payment possibilities: If you mail your estimated payment, as long as the 1040ES voucher's envelope is postmarked by the 15th, it's counted as being on time.
You can pay electronically by transferring the payment from your bank account to the IRS via its Electronic Federal Tax Payment System, or EFTPS, although you must be enrolled in the system before you can make the payment. This takes a couple of weeks, so if this appeals to you, check it out now so you can use the system for your September payment.
And finally, don't forget your state taxes. If you owe estimated taxes to your state tax collector, most of them are on the IRS payment schedule.