I’m going to ruthlessly assault an expired equine mammal, like a fire-sale gong.
Again.
It’s the Sunday before the final Estimated Tax deadline, and I just know you’re procrastinating.
Again.
I’m like Santa Claus that way, you know.
I see you, and most of y’all are on my naughty list.
There’s nobody standing over you making you do it.
You’re not going to go to jail, or otherwise get in any legal trouble for NOT doing it.
So…where’s your motivation?
I’ll tell you.
Please, allow me to enlighten you.
This should be a Jeopardy question.
IRS Fun Facts, for $400.
Ready?
“The number-one most commonly used enforcement tool used by the Internal Revenue Service.”
Make sure your response is in the form of a question:
“What are penalties?”
Correct!
Ask anybody that’s ever forgotten to file a partnership or S Corp return.
Thousands of dollars, potentially.
As far as underpayment goes, you could owe hundreds of extra dollars.
Easily.
Even over $1,000, in many cases.
Totally avoidable, with a little planning.
New to my ongoing continuous Estimated Taxes rant?
First-time visitor to my feed?
Let me go over the “why,” real quick-like for ya.
If you work a job where you fill out a W4 and get a paycheck with a frequency.
(Every other week, twice a month, sometimes even monthly).
You have your taxes withheld for you, and your employer sends them in.
Easy peasy.
If you do NOT work a job, but endeavor to find the courage to work for yourself, how does the tax thing happen?
Estimated Taxes.
It’s not particularly grammatically correct to capitalize Estimated Taxes like it’s some kind of awesome proper noun, worthy of exalted status, but I do it in my writing, and in my practice, anyway.
To drive home a damn point.
THEY’RE IMPORTANT!
If you had your first good year in 2021 (many did, and congratulations!), and you’re suddenly nervous reading this, that’s okay.
That’s why we’re having this friendly little time together, you and I.
Because the fourth and final deadline is ahead of us. This Tuesday.
Two more days.
If you believe you will owe more than $1,000 in un-withheld tax in April, making a payment by this Tuesday could save you quite a bit of money.
If you’re not crazy about hiring an accountant at the last minute I’ll share that there are several decent 1040 calculators available online, if you’re wondering how to arrive at a number.
Remember when you’re doing it that it’s an estimate. You don’t have to, or even WANT to, send in the exact amount a calculator tells you, because sometimes you find hidden deductions or credits.
Round that down a little. I like whole hundreds amounts, myself.
Oh, and don’t forget to factor in the March stimulus payment, and advanced child tax credits payments if you got them.
I hope that you got something out of this today, and that you make some kind of payment by Tuesday.
While you’re at it, how about resolving to make payments four times a year?
That’s a lot less than every single paycheck, and with some planning it’s not too hard, really.
Let me go over the schedule in writing for your reference here:
April 15th – for January through March
June 15th – for April and May
September 15th – for June through August
January 15th of the following year – for September through December
If any of them lands on a weekend or holiday we get to move it up. In fact, this year’s April deadline is the 18th because of a Washington D.C. holiday.
So is the 1040 filing deadline. Yay, right?
We have ways to ensure that you’re paying based on your company’s performance for each quarter of the year, so if the “divide by 4” method doesn’t work for your business ebb and flow, you’re not married to doing that.
If you’d like to learn more, let’s talk sometime, soon.
This is just one of a whole package of methods we have to not only save you what could be thousands of dollars in taxes, but also make your business more profitable.
Procrastinators: Eric Claus sees you. Let’s get this done, for one of the most elemental reasons why in the universe.
Saving money!