REMINDER – taxpayers who pay estimated taxes that the deadline to submit third quarter payment is Sept. 15, 2023.
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Taxpayers not subject to withholding may need to make quarterly estimated tax payments. Taxpayers such as gig workers, sole proprietors, retirees, partners and S corporation shareholders generally must make estimated tax payments if they expect to have a tax liability of $1,000 or more when they file their return.
A general rule of thumb is that taxpayers should make estimated tax payments if they expect:
- To owe at least $1,000 in taxes for 2023 after subtracting their withholding and tax credits.
- Their withholding and tax credits to be less than the smaller of:
- 90% of the tax to be shown on their 2023 tax return or
- 100% of the tax shown on their complete 12-month 2022 tax return.
Are you using 2022 tax due as a basis for your estimates in 2023? This works well if 2023 numbers look much like 2022 for you.For most people however, 2023 looks different. If thats your situation then you want to calculate how much you like owe whether that is more or less tax.
Reach out to your tax advisor asap and get crunching on those numbers. If you need help, reach out to us and we will gladly help you figure out how much you actually owe.