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turbo tax-anyone know if...

Posted by on Apr. 8, 2013 at 5:49 PM
  • 6 Replies
They have a way to do quarterly taxes? This is our first yr having to file them so I'm trying to figure it out.
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by on Apr. 8, 2013 at 5:49 PM
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Replies (1-6):
JZB
by Gold Member on Apr. 8, 2013 at 5:55 PM
Bump
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CampClan
by Platinum Member on Apr. 8, 2013 at 6:06 PM
No clue... I think they have a live chat option. If so ask one of the reps?
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Anonymous
by Anonymous 1 on Apr. 8, 2013 at 8:34 PM


Estimated Taxes: How to Determine What to Pay and When

Updated for Tax Year: 2012
We'll make it easy for you to figure out if you have to pay estimated taxes and if so, how much.
Figuring when and how to pay

If you're an employee, your employer withholds taxes from every paycheck and sends the money to the IRS, and probably to your state government as well. This way you pay your income taxes as you go. And, if you're like most wage earners, you get a nice refund at tax time.

But if you are self-employed, or if you have income other than your salary, you may need to pay estimated taxes each quarter to square your tax bill with Uncle Sam. You may owe estimated taxes if you receive income that isn't subject to withholding, such as:
  • Interest income
  • Dividends
  • Gains from sales of stock or other assets
  • Earnings from a business
  • Alimony
Do I need to pay estimated taxes?

That depends on your situation. The rule is that you must pay your taxes as you go.

If at filing time, you have not paid enough income taxes through withholding or quarterly estimated payments, you may have to pay a penalty for underpayment.

To determine whether you need to make quarterly estimates, answer these questions:
  1. Do you expect to owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year? If so, you're safe—you don't need to make estimated tax payments.
  2. Do you expect your federal income tax withholding (plus any estimated taxes paid on time) to amount to at least 90 percent of the tax that you will owe for this tax year? If so, then you're in the clear, and you don't need to make estimated tax payments.
  3. Do you expect that your income tax withholding will be at least 100 percent of the tax on your previous year's return? Or, if your adjusted gross income (Form 1040, line 37) on your tax return was over $150,000 ($75,000 if you're married and file separately), do you expect that your income tax withholding will be at least 110 percent of the tax you owed in tax for the previous year? If so, then you're not required to make estimated tax payments.

If you answered "no" to all of these questions, you must make estimated tax payments using Form 1040-ES. To avoid a penalty, your total tax payments (estimated taxes plus withholding) during the year must satisfy one of the requirements we just covered.

Which option should I choose?

That depends on your situation.

The safest option to avoid an underpayment penalties is to aim for "100 percent of your previous year's taxes." If your previous year's adjusted gross income was more than $150,000 (or $75,000 for those who are married and filing separate returns last year), you will have to pay in 110 percent of your previous year's taxes to satisfy the "safe-harbor" requirement. If you satisfy either test, you won't have to pay an estimated tax penalty, no matter how much tax you owe with your tax return.

If you expect your income this year to be less than last year and you don't want to pay more taxes than you think you will owe at year end, you can choose to pay 90 percent of your estimated current year tax bill. If the total of your estimated payments and withholding add up to less than 90 percent of what you owe, you may face an underpayment penalty. So you may want to avoid cutting your payments too close to the 90 percent mark to give yourself a little safety net.

If you expect your income this year to be more than your income last year and you don't want to end up owing any taxes when you file your return, try to make enough estimated tax payments to pay 100 percent of your current year income tax liability.

How should I figure what I owe?

You need to come up with a good estimate of the income and deductions you will report on your federal tax return.

You can use TurboTax tax preparation software to do the calculations for you, or get a copy of the worksheet accompanying Form 1040-ES and work your way through it. Either way, you'll need some items so you can plan what your estimated tax payments should be:

  • Your previous year's return. Use your previous year's federal tax return as a check to make sure you include all the income and deductions you expect to take on your current year's tax return. You should also look at the total tax you paid if you are going to base your estimated tax payments on 100 or 110 percent of your previous year's taxes.
     
  • Your record of any estimated tax payments you've already made for the year. You need to take those payments into account when you determine how much tax you still owe, so have your check register handy to look up the amounts and the dates you paid.
Consider paying with your refund

One easy way to get a jump on paying your next year's taxes is to apply your previous year's tax refund to your next year's taxes. If you won't have federal income tax withheld from wages, or if you have other income and your withholding will not be enough to cover your tax bill, you probably need to make quarterly estimated tax payments. Having all or part of your overpayment applied to your estimated taxes is a relatively painless way to take care of at least some of what you owe for coming year.

What if I don't pay?

You could end up owing the IRS an underpayment penalty in addition to the taxes that you owe. The penalty will depend on how much you owe and how long you have owed it to the IRS.

Result: You will have to write a larger check to the IRS when you file your return.

Should I pay in equal amounts?

Usually, you pay your estimated tax payments in four equal installments. But you might end up with unequal payments in some circumstances:

  • If you had your previous year's overpayment credited to your current year's estimated tax payments
  • If you don't figure your estimated payments until after April when the first one is due
  • If you unexpectedly make a lot of money in one quarter
Example:

You calculate that you need to pay $10,000 in estimated taxes throughout the year, and you don't make your first payment until June 15 (when the second estimate is due), so your first payment will be $5,000. Your September payment and your January payment will be $2,500 each. However, you may still owe an underpayment penalty for the first quarter.

For fishermen and farmers

You have special criteria to meet, but you may end up paying less in estimated taxes. You're considered a qualified farmer or fisherman if you earn more than two thirds of your gross income from farming or commercial fishing.

If you're not sure you qualify, or how this all works, TurboTax can help you figure your gross taxable income and what fishing and farming income you can include as qualified income.


http://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/Estimated-Taxes--How-to-Determine-What-to-Pay-and-When/INF12007.html

capmonkey93
by on Apr. 8, 2013 at 8:46 PM

DO NOT USE IT!!!!!!!! i know this is bad, but i wasnt sure they did it right and when i went back to find out what i was doing wrong and they missed $3000 

JZB
by Gold Member on Apr. 8, 2013 at 9:56 PM
Can I ask how?


Quoting capmonkey93:

DO NOT USE IT!!!!!!!! i know this is bad, but i wasnt sure they did it right and when i went back to find out what i was doing wrong and they missed $3000 


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KristenFowles
by Ruby Member on Apr. 8, 2013 at 9:58 PM
I LOVE turbo tax. But not sure about quarterly. Here's a bump!
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