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Video instructions and help with filling out and completing Where Form 2220 Corporations

Instructions and Help about Where Form 2220 Corporations

Hey, my name is Keith Hall. I'm a CPA and I have been working with small businesses for over 25 years, helping them with their taxes. You may have a question today about estimated taxes. Do you have to pay estimated taxes? Well, interestingly enough, the answer is no, you're not really required to. However, if you don't pay them, it's going to cost you. So, I answer that question a little bit tongue-in-cheek because, certainly, you should make the estimated tax payments that you are required to. The key point is that the IRS has a pay-as-you-go system for taxes. Most people who are employees have their company withhold taxes out of their paycheck and send it to the IRS on their behalf. But, as small business owners, we don't have anyone to do that for us. Therefore, we have to keep up with the pay-as-you-go system by making estimated tax payments. Now, these payments are due four times a year: April 15th, June 15th, September 15th, and January 15th. Basically, four equal payments. The real question about estimated taxes is how much should your estimated tax payment be, and that's really the difficult part. The real answer is that you should make enough in estimated tax payments to make sure you avoid all IRS penalties for late payment of tax because that's where it gets really expensive if you don't make those deposits. The IRS knows that it is tough to estimate, so they give us a couple of "get-out-of-jail-free" cards, also known as safe harbors, for avoiding those penalties. The first one is the easiest to remember. If you pay in enough in your estimated tax payments to at least equal what you paid last year, then no matter how much you owe or how much you...