Nesteggg Accounting

  • Home
  • Services
    • Nesteggg Accounting
      • Payroll Services
      • Cannabis Accounting
    • Egggsact Tax, Inc.
    • Forms
      • Free Accounting Analysis
      • Business Services Agreement
      • New Corporation/LLC Request
      • New Account Setup
  • Contact Us

IRS: Make an estimated tax payment now to avoid a tax time surprise

IRS: Make an estimated tax payment now to avoid a tax time surprise

WASHINGTON — The Internal Revenue Service today advised employees, whose 2018 federal income tax withholding unexpectedly falls short of their tax liability for the year, that they can still avoid a tax-time surprise by making a quarterly estimated tax payment directly to the IRS. The deadline for making a payment for the fourth quarter of 2018 is Tuesday, Jan. 15, 2019.

Although the Tax Cuts and Jobs Act (TCJA), the tax reform law enacted last December, lowered tax rates for most people, it also nearly doubled the standard deduction and limited or discontinued many deductions, among other changes. Though most 2018 tax filers are still expected to get refunds, the number who owe tax, and in some cases a penalty, is likely to be larger than in recent years, and many of them are likely to be people who have always gotten refunds.

Taxpayers who itemized in the past who now choose to take advantage of the increased standard deduction, as well as two-wage-earner households, employees with nonwage sources of income and those with complex tax situations, are at most risk of having too little tax withheld from their pay. This is especially true if they didn’t update their withholding earlier this year.

In addition, various financial transactions, especially those occurring late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, real estate or other property sold at a profit.

For anyone at risk for a tax-time surprise, making an estimated tax payment soon is the fastest and easiest solution. Form 1040-ES, available on IRS.gov, includes a useful worksheet for figuring the right amount to pay. This form also includes a quick rundown of key tax changes and the federal income tax rate schedules for 2018.

A companion publication, Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.

The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. If paying by check, be sure to make the check payable to the “United States Treasury.”

Though it’s too early to file a 2018 return, it’s never too early to get ready for the tax-filing season ahead. Though a good idea any year, starting early is a particularly good idea this year, when most tax filers will face revised tax rates and an altered array of deductions and credits.

To help anyone wishing to sketch out their return early, the IRS has already posted the 2018 Form 1040 and its instructions. Many supplemental forms and schedules have also been posted and others are being added every day.

Two other useful resources are Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318, Tax Reform What’s New for Your Business. For other tips and resources, check out the Get Ready page on IRS.gov.

Recent Posts

  • Economy Opening… Stop… Start…
  • Road Map to Opening
  • Tried Calling?
  • Free Credit Reports
  • CA License Extensions for Cannabis Business
  • What Are Libraries Doing Now
  • Cannabis Markup to Remain the 80%
  • Time to Retire?

Archives

  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018

Categories

  • Cannabis Compliant Accounting + Tax
  • NestEggg's Small Business HELP
  • News
  • Uncategorized

Stay Connected

Nesteggg Facebook

The Nesteggg Group ©2019
All Rights Reserved

Get in Touch

1127 St. Paul Ave
Tacoma WA 98421

1-(888) 987-NEST

accounting@nesteggg.com

Web Design & Maintenance by AquaZebra

constant contact

Copyright © 2023 · Executive Pro Theme on Genesis Framework · WordPress · Log in