If I have 10k earning 5% in a money market account, do I need to pay quarterly estimated taxes, and if so, how much? What if it is 100k? 500k? $1,000,000? $5,000,000? None of this makes sense to me. I ask some people they say no, I ask other people they say yes. And if you do have to pay them, where do you send the money?
2007-04-12 12:03:50 · 8 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
you pay 4 times each year,
04/15
06/15
09/15
01/15
No
yes
yes
yes
you can look at the IRS web site (irs.gov) for address of where to send. different states have different address to send estimates to.
Take the interest you make per year, multiply time the tax rate you pay, divide that by 4 and pay that amount each quarter.
2007-04-12 12:14:29 · answer #1 · answered by Jo Blo 6 · 0⤊ 0⤋
If you are to owe less than $1000 at the end of the year, or if you've paid in at least the total amount of your tax liability from the previous year, then you don't have to pay quarterly estimated tax. Otherwise, download form 1040ES and its instructions, and it will tell you how, when and where to file.
At 5% interest on $10K, your income on that would be $500, and the taxes at most, if you're in a 35% bracket, would be $175. You wouldn't have to make estimated payments because of that as long as you had enough withheld to pay most of the taxes on any other income you have.
2007-04-12 13:42:34 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
When your total estimated taxes exceed $1,000, you need to make quarterly estimated tax payments.
Download the Form 1040ES package from the IRS website. It will help you estimate your taxes and set up your payments.
$10k in a fund at 5% would only generate $500 a year in income, not enogh to even file if it was your only income. $1 million would earn $50, more than enough for you to have to pay estimated taxes.
2007-04-12 12:18:13 · answer #3 · answered by Bostonian In MO 7 · 2⤊ 0⤋
You do have to if you owed more than $1,000 the previous year, ,but it minimized the burden of coming up with a large chunk of cash as payment at once. However, the penalties and interest for not paying estimated taxes are severe. One pays them quarterly, on April 15, June 15, Sept 15 and Jan 15. If you expect to owe. With your 10K, you don't have too because tax on 5% is very minimal.
2007-04-12 12:17:51 · answer #4 · answered by emulwa 2 · 0⤊ 2⤋
Do you have other income from which taxes are withheld? If you do, and your withholding is sufficient to cover your tax liability without estimated payments, the payments are not required at any income level. The IRS FAQ below addresses you question.
2007-04-12 12:50:12 · answer #5 · answered by STEVEN F 7 · 0⤊ 0⤋
you have 6 weeks left in 2009. pass bump your W-4 to strengthen the quantity withheld to convey your finished withholding for 2009 to be greater effective than your tax invoice in 2008. which would be a secure harbor and get you off the hook. (you need to bump the money by ability of approximately $1800.)
2016-10-02 21:41:47 · answer #6 · answered by carol 4 · 0⤊ 0⤋
you are only required to pay estimate taxes if you owed taxes from the previous year. the irs will determine if you should be paying estimated tax payments and rest assured they will give you the little coupons with the dollar amount due with the address!
2007-04-12 12:17:57 · answer #7 · answered by karen h 3 · 0⤊ 3⤋
Most Amercans do not need to pay taxes.. go to www.losthorizons.com and see for yourself.. the largest hoaz ever perpetrated in American history
2007-04-12 13:01:41 · answer #8 · answered by winetaster6 2 · 0⤊ 1⤋