Who Needs to Pay Income Taxes
It Doesn't Matter How You Generate the Income
The Internal Revenue Service aka U,ncle S,am wants taxpayers aka U.S. citizens to know that income not subject to withholding, such as income from Self-Employment/ Gig work, Interest Income, Dividends , Capital gains, Rent or 1099 earnings may need to make estimated tax payments throughout the year. This includes freelancers, retirees, investors, businesses and corporations.
What Does Matter?
Paying on time helps taxpayers stay compliant and helps to avoid falling behind on their taxes and the underpayment penalties And unlike signing up to be drafted into the armed forces, paying taxes and the penalties is not optional, U.ncle S.am will collect.
Who needs to pay estimated tax?
- Taxpayers including sole proprietors, partners and S corporation shareholders who expect to have a tax liability of at least $1,000 for the year.
- Corporations that expect to owe tax of $500 or more. See Publication 542, Corporations.
- Individuals earning income from gig work, freelance work or from sales of goods and services, even if they receive a Form 1099-K. Recipients of Form 1099-K, Payment Card and Third Party Network Transactions PDF must use it with other tax records to report income.
Tax Planning Is For EveryOne!
Planning ahead can help you Stay ready to file an accurate income tax return. Keeping good records can help you reduce, eliminate any federal tax liability, or increase return. Make sure your have the information needed to avoid delays that can slow your tax refund. Make sure to have the Personal information Needed to File such as Your name on record with the Social Security Administration (SSA) , Social Security number or individual tax ID number (ITIN) for you and anyone else on your return. *If you were a victim of identity theft, your IP PIN*, You will also need your Bank account and routing numbers to get a refund or pay by direct deposit.
Learn the IRS Tax Calender
Key Deadlines and Dates You Should Know about
Using the IRS Tax Calendar can help you avoid missing important deadlines, view important due dates and actions for key filing deadlines each month.
Key features and benefits:
- Convenience: Pay federal taxes online or by phone, 24/7 or create online account .
- Advance payments: Individuals can schedule estimated payments up to 365 days in advance, and businesses can schedule 120 days in advance.
- Payment history: View your tax payment history.
In essence, U.ncle S.am now provides a modernization of the tax payment process is an effort to move away from paper-based systems to an electronic one that is intended to offer more convenient and efficient ways to fulfill federal tax obligations.
For the latest information about changes or developments please visit Forms & instructions for your specific form or publication.
OPTIONS FOR PAYING FEDERAL TAXES
Credits, Deductions, Exemptions, Oh My!
An OIC to Maintain Good Standing
Staying Compliant requires due dilegince be used to pay and file taxes. More often than many might think, the growing IRS tax codes can be a bit hard to understand and when filing federal income taxes many taxpayers get confused. Fortunately, If paying your full tax liability creates a financial hardship, you can submit an Offer In Compromise to settle your tax debt for less than the full amount
The IRS will take in to consideration your unique set of facts and circumstances, including your Income, Expenses, asset equity and ability to pay. The IRS generally approves an Offer In Compromise when the amount you offer represents the most the IRS can expect to collect within a reasonable period of time.
Find submission forms and step-by-step instructions in Form 656-B, Offer in Compromise Booklet. Complete an application package Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms. Form 656(s) – you must submit individual and business tax debt (Corporation/ LLC/ Partnership) on separate Forms 656.
