This is a Public Service Announcement for anyone who's been hit with an "Estimated Tax Penalty" when filing their annual returns on April 15.
Please don't confuse what I am saying with professional advice - my intent is only to draw your attention to the Jan. 15 due date for Estimated Payments. Talk to a paid professional, if you have any questions.
Taxes are due on a quarterly basis - on April 15, June 15, Sept. 15, and Jan. 15. The FIRST date for which a penalty can be charged is Jan.15, this year adjusted to Jan. 16 because of the MLK holiday. That is, it is not too late to avoid the penalty, even if, like me, you have paid $ZERO estimated taxes so far.
Reasons for the penalty include too little withholding, or earnings with no withholding. This can happen from having more than one job, such as a married couple who both work, or investment, SS, or other income where nothing was withheld. If you owe more than $1000 on April 15, or have paid less than 90% of your taxes by Jan. 15 (this drops to 80% if filing the Form 1040ES each quarter). In my case, I will simply pay the SAME taxes this year as I did last year to avoid the penalty.
To avoid the penalty, estimate your taxes NOW and file a Form 1040-ES for 2017, or use the EFTPS electronic payment system. The Form 2210, Underpayment of Estimated Tax by Individuals can be used to help you figure out how much you need to pay TODAY to avoid the penalty.
