What do I do now, if I haven't paid my estimated taxes?

Question

In 2005, I made little, and paid little taxes. I didn't "expect to pay $1000 or more" on my 2006 tax return. This year I've made much more, but is it too late to begin quarterly payments? If I pay some taxes now, will they penalize me for not paying earlier? Don't I need to just pay at least as much as last year to avoid penalties? And can I do this with withholdings from checks I expect to receive? What about the self-employment taxes? Clearly I "expect to pay" more than $1,000...

So far, as a self-employed individual, I've made no payments. My husband, however, may have paychecks coming in, in which we can have taxes taken from them.

Answer 1

One of the things I see a lot in the tax biz is people who are self-employed and fail to make Estimated Tax Payments. This is a big mistake. Even if you have the money next April (often people don't-you could get hit with a penalty for not making the estimated payments). Yes, you can start now. If you have a W2 job, you could have extra taken out, but if you are self-employed it is best to do the estimates. The Form is a 1040ES. You can download it and the instructions from www.irs.gov.

Answer 2

If you are filing jointly, the total of your income and your husband's, and the amount each of you has had taken out or paid estimated, is what will count.

Technically, you're only in the clear on paying in as much as last year's total taxes if you paid all estimated payments on time, and you can be penalized for the one you've already missed, but if you start this cycle and get caught up by the end of the year, odds are you won't have a problem or get penalized.

Yes, definitely start making estimated payments now. And include the self-employment taxes in your calculation of how much you have to pay in. This can be done either by filing estimated, or by having your husband increase his withholding. At the end, for joint filers, they don't care who the withholding/estimated payments came from, or whose income was what - it's the totals, not the individual amounts, that count. And self-employment taxes are definitely part of the total, and need to be paid as you go, not just at the end or you're subject to penalties. And not only will you avoid penalties, but you won't have to come up with huge sums next year when you file your taxes.

Answer 3

Go to the nearest Income Tax Office and asked for the tax return you filed. From there, asked if the payments were just correct. If not, volunteer to pay the deficiency so that you will not be penalized.

Answer 4

Go ahead and pay your quarterly taxes, even if they are late, and consult a professional for any penalty. Self-employment taxes are paid at the end of each year, but there are some exceptions.

Answer 5

No, relax, you won't be penalized for getting a better job. Just pay the taxes at the end of the fiscal year like everybody else does. You may not have to pay any taxes, since they take it off your paychecks, and if you have deductions

Answer 6

if you are paid on a w2, you can immediately change your withholdings to prepay the anticipated tax. if you are paid on a 1099, you can certainly begin quarterly tax payments now. your tax advisor should be able to advise you on the proper course of action. don't fear the irs, they are actually quite easy to work with if you play straight with them. should you owe taxes and be unable to pay, a payment arrangement can be easily arranged.

Answer 7

Hope you don't get audited
Or call the IRS