The main reason most Arizona individuals and small business owners run into tax problems with the IRS is that they fail to pay their quarterly estimated taxes correctly. But figuring out your estimated payments is nowhere near as hard as doing your annual return in April.
While the IRS provides a worksheet to figure your April tax bill, most taxpayers take the “safe harbor” approach; the IRS considers a taxpayer compliant as long as they pay either 90% of their final tax bill or a certain percentage of their previous year’s bill by January 15th of the next year. Paying either of these amounts protects the taxpayer from underpayment penalties and interest no matter how much higher their tax bill is in the current year compared to the last. But be careful – the safe harbor percentage varies depending on your gross income, so be sure to check IRS guidelines before figuring your payments.
For those who have seasonal income, there is always the option of paying on the annualized income system, meaning you don’t have to pay the taxes until the quarter in which you earn the money. This option does require extra paperwork and calculations, so be prepared and find out what you need ahead of time by checking the IRS website at www.IRS.gov .
Whatever method you choose, be sure that you understand your tax obligations, and if you have any questions, check with a qualified tax professional.
At The Pew Law Center, PLLC, we understand that if you do run into tax problems with the IRS, it can be overwhelming. Whether you owe back taxes, haven’t filed taxes for several years, or have received an audit or wage garnishment notice from the IRS, the attorneys at The Pew Law Center, PLLC can help you or your business with these and any other federal and state tax problems.
We are a dedicated debt relief law firm. We help people from Phoenix, Mesa, Gilbert, Queen Creek, Chandler, Scottsdale, Apache Junction, Tempe and throughout Arizona work through tough tax problems or file for bankruptcy every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing tax problems. Please don’t wait another moment. Call us right away – our attorneys will help get you the fresh start you deserve.