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Many clients ask if it is more advantageous to pay quarterly tax estimates or utilize their tax withholding. I wish there were a simple, cookie-cutter answer. However, as no two taxpayers are alike, the same goes for the manner in which one can pay one’s taxes.
Both methods of paying income tax have their pros and cons. The best selection depends on your personal preference and, more so, financial situation. A majority of self-employed individuals must utilize quarterly payments. However, if you have an income source such as retirement distributions, social security or employee wages, you have the option of withholding tax from those income streams in lieu of paying quarterly.
I pay all the taxes owed, and not a penny more” – Mitt Romney
For many taxpayers, the dread of gathering information, preparing a tax return, and filing it is tedious and time consuming. However, just as the sun shines brightest after a rain, cheers and smiles replace the angst of prep when the tax refund check makes its way to the bank account.
“I’m going to … take a trip, buy a TV, go shopping…” After all, a common thought when receiving the refund is “it’s my money AND it is a refund! I should live a little.”
From the IRS newsroom:
All taxpayers should file on time, even if they can’t pay what they owe. This saves them from potentially paying a failure to file penalty. Taxes are due by the original due date of the return.
Here are four tips for those who can’t pay their taxes in full by the April 18 due date:
If you are a taxpayer in the homestretch of preparing to file your income tax return, keep in mind these ten points that could affect your tax bill.
This article appears in Crains Cleveland Business
By Steven A. Dimengo and Richard B. Fry III
Buckingham, Doolittle & Burroughs, LLC.
February 12, 2017 - Gov. Kasich’s quest to lower the Ohio personal income tax rate continues in his latest proposed biennium budget, even in the face of Ohio’s tax revenue falling short of estimates.
Each year, some taxpayers find themselves scrambling to find their income tax return paperwork, a year's worth of receipts, and ultimately becomes stressed in the attempt to file their tax return by April 18. Others know and understand that simply filing a tax extension can earn them time, reduce their stress, and possibly, incur a lower tax bill.
On December 18, 2015, President Obama signed legislation called “Protecting Americans from Tax Hikes” Act of 2015, or the PATH Act for short.
The PATH Act contained many extensions and changes to existing tax laws. The Act also included a provision which will delay refunds for certain taxpayers. The IRS is now required to not issue a refund to anyone claiming the Earned Income Tax Credit or the Additional Child Tax Credit until February 15. Both of these refunds are considered “refundable credits,” which are essentially treated as additional tax payments, and can reduce one’s tax liability below zero. More, the PATH Act was enacted to give the IRS more time to review refund claims, in an effort to reduce fraud and catch refunds that may be improperly issued.
Do you have questions about the PATH Act, your refund, or income tax preparation? Let's talk! Contact me at firstname.lastname@example.org or any of the professionals here at 216.831.0733. We're ready to start the conversation and end the confusion.