While this time of year is one of my busiest, it’s also one of my favorite times. It’s strange for many but I really enjoy “crunching numbers” with the end goal of helping all of my clients maximize and take advantage of any opportunities afforded through proper planning. One thing is for certain, we all have a responsibility as it relates to taxes in one way or another.
When it comes to income taxes, I usually see the most misunderstandings in the area of estimated tax. According to the IRS, “Estimated tax is the method used to pay tax on income that isn’t subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income isn’t enough.”
It’s important to make sure you are aware of whether or not you are required to pay estimated taxes because there may be a penalty for failure to do so. Be sure to speak with your trusted Certified Public Accountant to ensure you have an accurate assessment of your tax and accounting needs.
Visit the IRS website for additional information- irs.gov