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Video instructions and help with filling out and completing Fill Form 2220 Taxed

Instructions and Help about Fill Form 2220 Taxed

The next topic is quarterly estimated tax payments. Here, the big one is discussed. Just a little background on quarterly estimated tax payments - when are you required to start submitting them? Not everyone is required to submit quarterly estimated tax payments. By law, the IRS states that if you are estimated to owe more than a thousand dollars in taxes by year-end for your 1099 income, not your W-2, then you are required to start submitting quarterly estimated tax payments. There are four due dates for quarterly estimated tax payments: April 15, June 15, September 15, and January 15th of the following year. There are several ways to make the payment - you can mail it in, pay over the phone, or pay it online, which is a lot easier and more secure. The IRS has a link on their site to submit quarterly tax payments. The state of Illinois also allows online payment. Now, let's discuss how to calculate the payment to avoid penalties. There are two methods to avoid penalties for underpayment. Underpayment of taxes leads to interest and penalties when you file your 1040 the next year. So, how do you avoid underpayment? It is better to avoid overpaying the government and giving them an interest-free loan. The goal is to pay the appropriate amount. A refund is not necessarily a good thing as it means you overpaid in taxes. It is better to have that money throughout the year. The safe harbor rule suggests paying 100% of your prior taxes due. To determine this, you need to refer to your prior tax return, particularly line 63 on page 2 of your 1040. Divide that number by four to get the amount you should pay each quarter. Even if you end up with a better year...