Thursday, March 8, 2007

Estimated Taxes Paid Late

June --

I have a question regarding Estimated Tax. My income did not change a lot from last year, but now after I completed the filing and printed the forms I noticed that I have four vouchers for estimated tax and one for my owed tax. So I have to pay $1415 -- the amount I owe for 2006 and the estimated taxes?

I have four payments of $351. It is correct or I did something wrong on my filling?

What’s happens if I don’t make these payments? I think this year I had to pay underpayment penalty of $50.

Thank you for your advice.

Marcel


Hello Marcel,

Four payments of $351 = $1404. If the tax program you're using did it correctly it'll have you pay for 2007 what your tax was in 2006. Was your 2006 tax about $1400?

Nothing terrible happens if you pay your estimated taxes late, or even if don't pay them at all. You'll simply owe some penalty and interest.

I suggest you read the following two columns from my site: Estimated Tax Payments and Estimated Tax: How much should I pay?

Best regards,
June Walker


June, thank you, thank you so much for your response. I wasn't sure and I was afraid to send them away. Also thank you for the stuff you put out there on your website, it helps a lot a novice like me.
Marcel

2 comments:

Mark said...

For various reasons I decided to change the name of my business and re-incoporate as of April 2008. Do I need to file tax returns for each corporation even though I no longer use the old one? I had a few checks paid to me in the name of the old corp but I opened a new bank account and have only been using the new one from April thru December??

June Walker said...

Hi Mark,

Sorry, I do not give tax advice on corporations.

I will, however, give you a wake-up call!

If you are a corporation and you have reincorporated and if the internet and blog comments are the main source of your tax advice you are going to -- or may already have -- seriously mess-up.

Get a pro to advise you.

-- June