The how to’s of paying income tax quarterly

On Behalf of | Aug 30, 2019 | Income Tax

Certain Connecticut residents have to pay their taxes, not just once but four times a year. Freelancers and business owners typically do not pay taxes with every paycheck. If they make over a certain amount in a year, they must pay estimated income taxes quarterly or face having to pay penalties on top of what they owe.

How does one go about paying taxes quarterly? Most people can do this online. Others may wish to mail in their payments. These payments can be made via check, bank draft or credit card — though, there is a fee for using a credit card.

What is needed to estimate how much one owes? In order to determine how much is owed each quarter, one will need to look at several pieces of information. Some of them are:

  • Revenue
  • Expenses
  • Profits
  • Losses
  • Previous year’s taxes
  • Current tax brackets

Figuring out how much one owes the first time around may be a little difficult. Those who are not sure if they have come to the right numbers can help themselves by overestimating how much they owe rather than underestimating. Those who do not pay enough each quarter may have to pay underpayment penalties.

Connecticut residents who have to pay their income tax quarterly may run into issues with the Internal Revenue Service if there is anything wrong with their filings or if they simply fail to file. When in trouble with the IRS, dealing with the matter can be intimidating. Thankfully, it is one’s right to seek the assistance of legal counsel in order to address and resolve the issue as quickly as possible.