Estimates are NOT optional

September 8, 2020

We want to remind you that these Estimates are NOT optional! The IRS requires that you pay as you earn. If you are a W2 employee, taxes are withheld and paid on your behalf automatically. However, if you are self-employed, it is your responsibility to pay as you earn. If you have income in the first quarter, you are required to pay Q1 estimates by the first quarter deadline of April 15th, and so on for each subsequent quarter (Q1 is due 4/15; Q2 is due 7/15; Q3 is due 9/15; Q4 is due 1/15 of the following year).

Paul posted a video a while back here: https://youtu.be/ARTjK21FGVc
This is a link to our FAQ page on our website concerning estimates: http://smarttaxadvisor.com/faq/#1535644687526-0d8ffcaa-4c50
This is a link to the IRS on paying estimates: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

The state of Massachusetts sent out notices over the weekend for anyone who was required to pay estimates but either did not or did not pay on time.
Our tax software generally calculates the penalty amount, but it doesn’t always pick it all up since penalties and interest continue to accrue each month until the entire balance, including penalties and interest, has been paid in full. If you received Estimates to pay and did not pay them, you will pay penalties and interest. Some of it is calculated on your tax return, but the IRS and state will pick up on any additional amount due, which will prompt the letter.

If you received a letter from the IRS or DOR for failure to pay proper estimated taxes, and you did not pay the required estimates last year, you do in fact owe the amount due on the letter.

To find your estimated payment vouchers, please log onto the portal (make sure you are in your Personal account if you have a separate business return your accounts will be linked: click the arrow next to your name or business name at the top right corner to toggle between accounts), then go to “Get a Copy of My Tax Return & Documents” to download the file type “ESTIMATES.”

Don’t hestitate to contact us.

Millbury MA:

Newport RI:

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