What is an estimated tax return?
In the US, the estimated tax return is a form that is submitted to the Internal Revenue Service (IRS) for calculating the tax amount that owes if the taxpayer's income is not subject to detention. Generally, the taxpayer shall file an estimated tax return when they expect that after deducting your withholding amounts and tax loans, they expect to owe less than $ 1,000 (USD). In addition, the taxpayer expects their withholding and tax loans to be smaller of two amounts: 90% of the tax amount of the tax return or 100% of the tax return of the previous year.
IRS Form 1040-AES is a form that must be filled in and filed when filing an estimated tax return. Worksheets available in the form are passed by taxpayers by calculating the estimated tax that is owed.
Form 1040-AS is a form that is submitted in addition to the federal tax return 1040. The primary components or factors for estimation of the outstanding tax are modified gross income and deductions. The taxpayer will also be nee tooD You want to pull information from specific lines on form 1040.
If the difference between the required annual payment to avoid a fine (line 14c from the 1040-ES form) and line 15 of the same form is zero or less than zero, then the taxpayer is not obliged to make estimated tax payments. If this data is greater than zero, the taxpayer will have to hand over the retained income tax and is estimated to be detained from the total estimated tax for the tax year during the tax year.
If the answer is less than $ 1,000, then the taxpayer is not obliged to pay the estimated tax payment. If the answer is $ 1,000 or more, the taxpayer is obliged to make estimated tax payments and will have to calculate payments.
The estimated tax return payments are due four times a year. The first payment is in April and the second payment is due in June. ThirdThe Latant is due in September and the final payment is due in January of the following year. For example, when filing federal tax returns for 2010, the final payment would be payable in January 2011. The first payment in April is a quarter of the amount entered in line 16a forms 1040-ES. This is the number calculated in deduction of income tax and is estimated to be detained during the tax year from the required annual payment to prevent sanction. As tax laws are subject to frequent changes and updates, it is recommended that taxpayers to explore the topic on the IRS website or search for the advice of a certified tax preparation or accountant to avoid potentially costly errors.