It’s a Little Trickier This Year. Figuring out quarterly tax payments is a little more complicated this year.
The Tax Cuts and Jobs Act of December 2017 ushered in over 500 pages of tax code revisions.
Among other changes, it lowered tax rates and created a deduction for pass-through entities and the self-employed. It also does away with personal exemptions and suspends some itemized deductions.
However, there is a need for technical corrections, which may come this summer.
Even so, there are penalties for underpaying your quarterly tax obligation. The first payment was due April 17, and the second is due June 15.
There is good news though.
You can take the safe harbor option.
The safe harbor option is based on the taxes that you paid last year. You will need to withhold 100% of what you paid last year in order to avoid an underpayment penalty.
However, if your income is over $150,000, you must pay 110% of last year’s tax amount.
If you want to try to estimate how much tax you will owe, you can use the IRS’s withholding calculator. It was updated in February with the new changes from the Tax Cuts and Jobs Act. One caution: If you expect a big jump in your income this year, it’s going to be harder to estimate the changes to your tax payments. That’s why the safe harbor option is so attractive.
For expert help, call us at (772) 337-1040. We can help you determine the correct amount for your quarterly tax payments… and prevent a nasty surprise at the end of the year.
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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting Services as well as the Enrolled Agent and Certified Tax Resolution Specialist for SFS Tax Problem Solutions.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.
The book is available in paperback and ebook on https://Amazon.com
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For more on SFS Tax & Accounting Services, visit https://sfstaxacct.com/
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738 Colorado Avenue Stuart, FL 34994
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Phone: 772-337-1040
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https://twitter.com/SFSTax
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