Payment tax plan
Hey Terry ! I listen to you all the time on the 720 WGN Radio
I am a mural artist so I get paid erratically … and currently am unemployed until August or September when my next project gets finalized, what I want to do is pay half my federal tax and half my state tax now and the remainder in August … I have found the make a payment portal on the IRS website, but it only has one box to put a payment in it so I don’t know where that payments going to , federal or state or even if that’s the correct procedure for what I wanna do here. If you could direct me to the correct path I should take in paying these taxes I would greatly appreciate it.
Terry Says
So called “independent contractors” or self-employed typically need to make quarterly estimated tax payments — especially if withholding is not taken out of your ultimate payment.
Have you read this entire section at IRS.gov: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
Especially, scroll down to this section:
How To Pay Estimated Taxes
You may send estimated tax payments with Form 1040-ES by mail, or you can pay online, by phone or from your mobile device using the IRS2Go app. You can also make your estimated tax payments through your online account, where you can see your payment history and other tax records. Go to IRS.gov/account. Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.
Using the Electronic Federal Tax Payment System (EFTPS) is the easiest way for individuals as well as businesses to pay federal taxes. Make ALL of your federal tax payments including federal tax deposits (FTDs), installment agreement and estimated tax payments using EFTPS. If it’s easier to pay your estimated taxes weekly, bi-weekly, monthly, etc. you can, as long as you’ve paid enough in by the end of the quarter. Using EFTPS, you can access a history of your payments, so you know how much and when you made your estimated tax payments.
Once you get set up, it’s easy. Just remember:
You will avoids a penalty if you paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.
