Every year, thousands of people fail to file their taxes in a timely manner and pay penalties and interest charges. This happens because they do not realize the importance of IRS tax deadlines. If you are one of these taxpayers, you may be interested in this blog article because it will provide tips on successfully paying quarterly taxes and avoiding penalties and interest.
This article provides details of how to do so successfully. These are very simple tax tips for everyone and will provide them with an easy way to pay their taxes.
Table of Contents
KNOW THE DUE DATES
Quarterly Estimated Taxes Are Due This Month!
As the tax season begins, keeping track of what you owe is important. Additionally, it can be quite confusing and overwhelming. That’s why we’ve created this article. Here are the due dates to remember when paying quarterly estimated taxes.
Quarterly Estimated Taxes Are Due April 15
Taxes must be filed for the previous year’s fourth quarter, which ends on December 31. While you can file your taxes as early as January 1, it is best to wait until April 15 to do so. That way, you will have all of the information available to you.
Quarterly Estimated Taxes Are Due June 15
The fifth quarter of the previous year ends on June 30, so it’s important to file your taxes for that quarter by June 15. That way, you will receive a full refund for the income you earned in the fourth quarter of the previous year.
Quarterly Estimated Taxes Are Due September 15
This is the final quarter of the previous year. The sixth quarter of the previous year ends on September 30, so you should file your taxes by September 15. That way, you will receive a full refund of your taxes.
REVIEW BUSINESS DEDUCTIONS
One of the most important things to remember while paying quarterly estimated taxes is to remember to deduct business deductions.
It doesn’t matter if you are a sole proprietor, a self-employed person, or a business owner. If you run a business, then it is likely that you will have to pay quarterly estimated taxes.
And that means you will need to take out certain expenses for your business from your personal income before paying your income tax.
As long as you have deducted them properly, you should be able to deduct them, but if you don’t, you can end up paying penalties and interest for not having the proper documentation for your business deductions.
For this reason, you must write down what you have deducted as a business expense on your quarterly estimated taxes and save them somewhere.
The best place to do this is in a notebook that you keep at home, or you can even make a file on your computer.
CONSIDER RETIREMENT TAX-BREAKS
Let’s make a plan to save money to cover our retirement.
The first way to save money is to invest in the stock market. We should try to buy as many stocks as possible because it is a sure way to grow our money.
If we do not have enough money to cover our retirement, we can take advantage of the government’s tax breaks and save money by buying bonds. We must ask ourselves, “Do I need this tax break?” and “Will it help me save money?”
If we have enough money to cover our retirement, we should continue saving for other reasons such as spending less than our savings, saving for our kid’s college, etc.
MAKE SAFE HARBOR PAYMENTS TO PREVENT PENALTIES
Making Safe Harbor Payments is the most important thing you can do to protect yourself.
For example, if you are receiving a W2 Form, and the income reported on that form exceeds your adjusted gross income, you may be able to make safe harbor payments.
You are protected if you make an estimated tax payment and file an extension.
The IRS uses the term “Safe Harbor Payments” to describe any tax liability for which a taxpayer has paid a portion of the liability. This includes income taxes withheld from wages and/or estimated tax payments.
Safe Harbor Payments are a credit on the taxpayer’s next year’s tax return.
Once the safe harbor payment has been made, you must wait to file until you have no unpaid tax liability (and the statute of limitations has expired).
Payments of Safe Harbor Taxes that are received after the filing deadline would not prevent the assessment of penalties and interest if the payment was late.
TRANSFER MONTHLY FUNDS TO A SAVINGS ACCOUNT
The first thing you need to do is open a savings account at a financial institution. There are a variety of things to consider when choosing a savings account. For example, you will want to ensure that the account has access to your checking account so that you can easily withdraw money from the account to spend on daily expenses. You may also want to open an account that earns a fixed interest rate to minimize the risk of losing your money.
Once you’ve chosen the right savings account, you will need to decide whether you want to use a debit card or a check. With a debit card, you can use the money in your savings account without ever writing a check. But you will need to have a checking account at the same financial institution in order to receive your paycheck.
If you don’t want to keep your money in a savings account, you can also transfer money from your checking account to a savings account by using a prepaid debit card.
CONSIDER PAYING AHEAD WITH YOUR REFUND
If you are going to take the standard deduction on your tax return, consider taking the standard deduction and paying $0 or the $1,000 minimum so you can claim a higher deduction for your retirement savings.
If you have a large refund coming your way, you might want to consider paying ahead. Not only will it help you to remember to pay your taxes, but it will also save you money on the taxes you owe. While paying your quarterly estimated taxes, you may want to consider paying a bit extra. This can help offset any future increases in your monthly Phone and Internet costs. Paying a bit extra each quarter can also help you avoid any penalties or interest charges that may be assessed if you underpay your taxes.
If you have the ability to do so, paying a bit extra on your quarterly estimated taxes may be a good idea. It can help you keep your monthly Phone and Internet costs down and avoid any penalties or interest charges that may come with underpaying your taxes.
CLAIM NO DEDUCTIONS FROM YOUR DAY JOB
First, you should know that your education expenses can qualify as a deduction. While you won’t see it on your W-2, your employer will still deduct a certain amount of money from your paycheck for tuition, books, and transportation.
If you are a student, there are several ways to claim this deduction. First, you can simply keep your receipts and submit them when you file your taxes. You can also use the IRS’s Student Tax Credit Calculator to figure out whether you qualify for the deduction.
Once you have submitted your receipts, you will get a copy of your tax return showing that the deduction was taken.
And because this is a deduction, it is refundable. You can, therefore, even use Form 1098-T to request a refund from your employer.
Different types of scholarships also qualify as deductions, including the Pell Grant and the Hope Scholarship. You can check whether these are applicable to you by logging on to the IRS’s Student Tax Credit Calculator.
The 7 steps to successfully pay quarterly estimated taxes
One of the most important things when it comes to saving money is to pay quarterly estimated taxes. That’s why we’ve created this to show you the process step by step and how to save money doing it.
- Find out what your total income is.
- Figure out your monthly expenses.
- Calculate your quarterly estimated taxes.
- Set aside the money to pay your quarterly estimated taxes.
- Pay your quarterly estimated taxes.
- Save some money for next year.
- Continue saving money in years to come.
Conclusion
As long as you are working, you should be filing and paying taxes quarterly (as opposed to annually). The sooner you file, the sooner you can deduct your business expenses, including depreciation. You can even claim any tax savings on your personal return, making this tax season a great time to transfer money from your personal account to your business accounts if you think you’ll get a refund.