10 Feb What Will Happen if I Don’t Pay My Quarterly Tax estimates This Year
Estimated tax payments are due between two to four months. Sometimes, that can get confusing. You’ll need to pay on April 15, then two months later on June 15, three months later on September 15, then the year ends! All of a sudden, surprise — you have another payment due in January!
With months on the road, you can quickly forget these dates. But if you don’t pay for your quarterly tax estimates this year and your tax bill is less than $1,000, then you have nothing to worry about. Now, if your total due is $1,000 or more, then you will need to pay. Here are the steps to take and what will happen if you don’t or can’t pay for your quarterly tax estimates this year.:
1. Pay partial
Once you realize that you missed a quarterly payment, pay what you can. Partial payments will go a long way once they compute the interests based on what is due, in addition to penalties. The partial payment that you make can significantly help reduce the total interest expenses on your taxes.
Here is an example, let’s say you owe $1,000 on June 15, and since money was tight because you paid just last April 15, you decided that you would rather spend what was due on the next payment date. That would be September 15, which is around 90 days away. The penalty is .5%
for each partial or full month that you miss your payment. This penalty can accumulate to as much as 25%.
2. Write to the IRS
If you missed and can’t pay for your estimated quarterly taxes, you will need to explain why. You will need to complete the IRS Form 2210, submit it along with a waiver and documented proof such as records from the police, hospital, insurance, disability, or retirement documents.
3. Stay on track
Suppose you missed a payment and are now trying to avoid paying the penalties on your next payment. Remember to keep track of the dates and have your Form 1040 ready, and this will be easier this time around because the form already indicates the computation of how much you owe.
Remember, if you owe the IRS less than $50,000.00 and requested an installment payment agreement, then not paying as agreed upon in your plan may cause problems. The goal is to keep your taxes as low as possible. As truck drivers, you have the advantage of deducting a significant amount from licensing fees, per-diem meals, telephone or internet access fees, subscriptions to publications related to trucking.
So keep track of your quarterly financial information, set those aside so that you or a financial firm such as Golden Tax Relief can help get your payments in order so you will never have to miss another payment again.
If you have any questions on other kinds of support you can get when it comes to your taxes, we invite you to contact the Golden Tax Relief team.