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Hey folks. There's some people on here who've been around the block longer than I have, and so I'm humbly looking for advice.
So, I work on a tugboat ship thing, and my company won't take illinois state income tax out of my paychecks.
I'm not sure what I owe, but it's something like a 5% flat rate. And I have to make these "Estimated Tax Payments". Well I don't mind paying my bills. And I'm pretty good financially. I pay my credit cards and phone bills on time. It's easy. But these estimated payments get me all confused. You have to pay them quarterly. And I paid the first quarter on time, but I haven't yet paid the second or third quarter (which was due in September 15). So I missed June 15th's and September 15th's payments.
I'm thinking about going to the Revenue Office in Chicago on Monday to try and settle up with them. I'm gonna offer to pay the third quarter early, so that we're squared away for the year.
Do you think this is a good idea? Or am I better off continuing to pay on OfficialPayments.gov, and just paying the estimated income tax late? I hate that OfficialPayments.gov because they take 50$ from you every time you make a payment, but I think my penalty should amount to 100$ (5% on 2000$ of late paid state income tax). But I really have no idea, it could be more, but the Revenue Service website is very confusing. I've only taken General Financial Accounting, which is great for understanding balance sheets and income statements, but I still can't understand these tax forms.
I'm just wondering if anyone has any experience with this estimated income tax. Do they really watch you on that and access fees for not paying on time? And if I go into that Revenue Office, do you think they're gonna say "Well, here's someone to put on the dookie (other term) list." I mean, I'm not a kid anymore (28 years old), so I understand I've gotta get better at this kind of thing. It's just so much easier when your work takes your tax out for you.... My mom thinks I should go to the office and just be straight with them. She thinks with a little charm, playing dumb and saying this is the first time it's happened to me, it'll work. I mean, this is the first time I've ever had to deal with estimated state income tax payments.......
So, if you were in my position, would you go to the revenue office, be honest with them, and offer up payment for the fourth quarter early?
Last edited by PeteyDangerous; 11/30/13 05:09 PM.
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I screw up my tax payments all the time.
Make your best guess on your final payment to get you up to date.
Figure out the correct amount on your filing. If you are wrong they will correct you.
I have an accountant do my filing so he makes sure its all correct even if my payments arent.
Joe Thomas #73
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IMO.. I'd go in, explain the situation and ask what you owe. Pay that plus whatever late penalty is assessed, then ask when the next payment date is and how much is due and pay that when it's due.
They will not be impressed that you wanna pay early. If anything they will think you're retarded for giving them anything early. Make interest on that money until it's due.
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I would also question whether these payments are actually due in advance.
Federal income tax is due to be paid on april 15th, by midnight. Paying early makes no sense. The government cannot require this.
For State taxes, I'm not sure, but I'm wondering if this is recommended rather than required.
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You are required to pay taxes "evenly" throughout the year for federal and state taxes - whether that is through payroll withholding or making quarterly estimated payments. There are two types of penalties. The 5% penalty is a failure to pay penalty. You get hit for this if you don't pay until you file. (Basically) My guess is that this happened to you for the 2012 filing. The other penalty is a late payment penalty and is interest charged from the date you should have paid until the date you did pay. The State won't know what you owe/owed until you file your tax return - that means they won't know your "penalty" until then either. Therefore, there is no "settling up" to do at the Revenue office at this time regarding the penalty issue. Make whatever payment amount you need to get "caught up" as soon as you can to reduce interest charges (penalty)...I'd simply mail it in with a voucher from the state website. http://tax.illinois.gov/TaxForms/IncmCurrentYear/Individual/IL-1040-ES.pdfIf they calculate a penalty after you file the return you'll have to pay it...I'd let them figure it out. If you want forgiveness of any penalty, they will tell you that you have to write a letter after the tax return is filed and a penalty is assessed. I'd stay away from the Revenue office...you will be wasting your time.
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Gotcha, that's the thing. I never had to deal with this before because I just started making significant money in 2013. That's why it's such a new thing for me. I was a student before, so I didn't owe the state of Connecticut anything because my final graduate year, I was too busy with school and on a ship during the summer to make any money. I had savings from working on a tugboat the year before which held me over.
I still think I might go to the office and see what they have to say. May be they can explain to me some easy way to do it and i'll be able to fill out the form and such there. They could also get me into the system possibly for electronic payments. Then I don't have to keep paying with officialpayments.gov and give them that 50$ convinience fee. I don't have an Illinois tax id card and i've never had to file taxes in Illinois because I didn't move here until 2013.
I don't really got much else to do Monday besides play videogames, watch Star Trek, pick up Amazon Black Friday buys at my door, delivered by UPS, and continuing to help proof read my g/f's thesis. That's the life of someone who works a month straight and gets a month straight off though. When I'm home, I might as well be retired, lol
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Legend
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If you have an accountant, they can determine your estimated payments for the next year, and give you the forms to submit with amount due each quarter.
At least, that's how my CPA does it for me.
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Quote:
At least, that's how my CPA does it for me.
How much do one of those run you? I'm just not sure it would be worth it
Last edited by PeteyDangerous; 12/01/13 04:10 PM.
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I think mine charges around 300 for personal taxes. Mine is kind of complicated because I'm a small business owner, so it is worth it to me.
Mainly, I could be wrong, but I think there is a formula for determining your estimated taxes for the next year. It is some percentage of the previous year's earnings. There should be a website that can calculate that for you.
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If you ever want to hold a cabinet position, then I would urge against you paying your taxes at all...
yebat' Putin
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If you ever want to hold a cabinet position, then I would urge against you paying your taxes at all...
Or if you want to be the Democrat candidate for Ohio LT Governor ...... or the chairman of the Ohio Republican Party ......
Because .... you know ..... by not paying your taxes you can empathize with the plight of the little people .......  
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
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Haha, anyway. Went buy the Revenue Service department today. Talked to some guy who was very eager to talk about taxes, lol.
He said that I don't have too much to worry about because I didn't file with Illinois last year. That means, they give me a break. So no tax penalty. No worries. No problems.
Just gotta make sure I pay some taxes soon and stop buying all these electronics on the internet........
I've been single handedly lifting the American Economy by it's boot straps since Thursday.
Or at least i've been lifting Amazon and Best Buy's Economy since Thursday.........
Last edited by PeteyDangerous; 12/02/13 05:28 PM.
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You are required to pay taxes "evenly" throughout the year for federal and state taxes - whether that is through payroll withholding or making quarterly estimated payments.
Thanks for jumping in Willie....you know more about it than I, but I knew Nelson was mistaken.
If everybody had like minds, we would never learn. GM Strong ![[Linked Image]](http://www.dawgtalkers.net/uploads/small-gator-chomp.gif)
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Quote:
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At least, that's how my CPA does it for me.
How much do one of those run you? I'm just not sure it would be worth it
Seeing as you don't know, and seeing as you are looking at paying a penalty, dropping $300 or so bucks a year to have a CPA advise you isn't bad money spent.....and it is deductable.
You got your license to do whatever it is you do as a merchant seamen on a tug. They got their license to advise people like you and I on what we owe, when we owe, what we can deduct, and what we can't.
If you are sick and you don't know what you are doing, it's best to go to a M.D., right? Same goes with if you have accounting problems, legal problems, electrical problems, or plumbing problems.
If everybody had like minds, we would never learn. GM Strong
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Quote:
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At least, that's how my CPA does it for me.
How much do one of those run you? I'm just not sure it would be worth it
We give our accountant about $200 (friend of my wife's family) each year to do our taxes. I'm figuring it would be about $300 if we didn't know her.
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Legend
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Quote:
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At least, that's how my CPA does it for me.
How much do one of those run you? I'm just not sure it would be worth it
We give our accountant about $200 (friend of my wife's family) each year to do our taxes. I'm figuring it would be about $300 if we didn't know her.
I pay a cpa $350 a year to figure the taxes for my business. I take my wife's w-2 and my spreadsheet with income and all business expenses to him. A few days later, I get the returns and mail in my first quarterly payments.
Plus, throughout the year, if I have questions (like this year Ohio required anything bought out of state that wasn't charged sales tax.......well, I got to pay the state of Ohio the sales tax on those purchases),,,,,,,but, he/they help me out with little to no charge, depending on the situation.
It's worth it for me.
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Legend
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Quote:
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At least, that's how my CPA does it for me.
How much do one of those run you? I'm just not sure it would be worth it
Seeing as you don't know, and seeing as you are looking at paying a penalty, dropping $300 or so bucks a year to have a CPA advise you isn't bad money spent.....and it is deductable.
You got your license to do whatever it is you do as a merchant seamen on a tug. They got their license to advise people like you and I on what we owe, when we owe, what we can deduct, and what we can't.
If you are sick and you don't know what you are doing, it's best to go to a M.D., right? Same goes with if you have accounting problems, legal problems, electrical problems, or plumbing problems.
I have two tax returns to do each year.. Corporate and personal. (and of course each entity, local, state and fed)
It costs me about 600 a year. My CPA has saved me many times that amount.
It's his job to stay abreast of the changes.. It's absolutly worth it.
#GMSTRONG
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dropping $300 or so bucks a year to have a CPA advise you isn't bad money spent.....and it is deductable.
I have to disagree. Spend a little time and do your own taxes. I have to be the 1st one to admit that I am not the brightest guy in the world, BUT people who do your taxes don't give a crap and they are wrong a lot of the time. I have been doing my own taxes for years, and my taxes are a bht complicated. I have saved 6,000 over the last 20 years, AND have been audited by the IRS twice. One time they owed me money by the time we were done, and the second time they retracted their nasty letter telling me I owed them money when I proved them wrong. Before that I had somebody do my taxes and I paid over paid over 10,000 in taxes that I did not owe 
I AM ALWAYS RIGHT... except when I am wrong.
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Quote:
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dropping $300 or so bucks a year to have a CPA advise you isn't bad money spent.....and it is deductable.
I have to disagree. Spend a little time and do your own taxes. I have to be the 1st one to admit that I am not the brightest guy in the world, BUT people who do your taxes don't give a crap and they are wrong a lot of the time. I have been doing my own taxes for years, and my taxes are a bit complicated. I have saved 6,000 over the last 20 years, AND have been audited by the IRS twice. One time they owed me money by the time we were done, and the second time they retracted their nasty letter telling me I owed them money when I proved them wrong. Before that I had somebody do my taxes and I paid over paid over 10,000 in taxes that I did not owe
If you get audited and the IRS owes YOU money, then your preparer wasn't/isn't worth a dime.
When my roof leaks, I do not get out my ladder. When my car won't start, I do not go beyond the jumper cables. I can figure out that stuff, but don't have the tools, equipment, or knowledge necessary to do it right.
I think EVERYONE should pay a pro to do their taxes...it's not about the papers that you get from them...it's about having someone on your side to make sure it's right and be there with you when you have questions or need advice.. (Disclaimer: I do taxes for a living...so I'm either spot on...or self-promoting...you decide.)
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Let me ask you a simple question Willie. If you get a 1099 misc form and your in the Auto business do you have to pay self employment taxes on the income?
I AM ALWAYS RIGHT... except when I am wrong.
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I paid to have my taxes done this past year, because I had a couple of strange situations I wasn't sure how to handle. I figured that I would owe over a grand.
I wound up somehow getting $200 or so back. (I don't remember the exact amount)
That $200 paid for my accountant, and I saved the grand I would have paid just because I didn't know any better.
The IRS sent me a letter about 2 weeks after my return was filed, saying that it was being examined. They then sent me a letter saying that it was approved, or similar wording. I was worried, but my accountant said not to worry about it.
This year my taxes will be simple, so l won't have to pay anyone to d my taxes.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
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Let me ask you a simple question Willie. If you get a 1099 misc form and your in the Auto business do you have to pay self employment taxes on the income?
It depends on which box the number is in. If the number is in Box 7 you likely have self-employment tax due. (Generally)
If you get a 1099 for SPIFFS, that number should be in Box 3. SPIFFS are not subject to self-employment tax.
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Don't forget that you are technically supposed to pay sales taxes on those internet purchases, even if you weren't charged tax at the time of purchase.  I know of a company in Alabama that almost got hit with a six figure fine for 10 years in unpaid internet purchase taxes. However, then they figured out (I'm not sure how they didn't know in the first place) that they were actually a tax exempt organization, as in fully filed, approved and everything during the investigation. They didn't have to pay and now they can make all of their purchases without paying sales tax. I still can't believe that nobody knew that they were tax exempt though.
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Quote:
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dropping $300 or so bucks a year to have a CPA advise you isn't bad money spent.....and it is deductable.
I have to disagree. Spend a little time and do your own taxes. I have to be the 1st one to admit that I am not the brightest guy in the world, BUT people who do your taxes don't give a crap and they are wrong a lot of the time. I have been doing my own taxes for years, and my taxes are a bit complicated. I have saved 6,000 over the last 20 years, AND have been audited by the IRS twice. One time they owed me money by the time we were done, and the second time they retracted their nasty letter telling me I owed them money when I proved them wrong. Before that I had somebody do my taxes and I paid over paid over 10,000 in taxes that I did not owe
Goes both ways. Some cpa's are scared of audits, so they don't take legal deductions, etc. Some "ex IRS" agents are so bold, they take deductions for things that haven't even occurred. Like, a $10,000 engine overhaul on a 1 year old semi. You don't have a bill for that overhaul? No problem. The irs will never ask for it.
"hey, we can save you money on tax this year if you buy a new trailer." "but, I don't need a new trailer". "Okay, then you'll have to write a check for this amount for taxes." I can't afford to write that check" "Then buy a new trailer and you won't need to write that check." "okay, I'll buy a new trailer"
Little while later, trucker is out of business because he couldn't afford the payments on the trailer.
It goes both ways. I use a cpa that I feel semi comfortable with....I"m fairly certain he could reduce my taxes somewhat, legally......but I'm also scared to death of the irs. There aren't many institutions in this once great country that can seize all your assets and demand that YOU prove you are right. The irs can do that. They don't need to prove their case before they do it..........they can just do it and put the "proof" of innocence on you.
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Legend
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Quote:
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Let me ask you a simple question Willie. If you get a 1099 misc form and your in the Auto business do you have to pay self employment taxes on the income?
It depends on which box the number is in. If the number is in Box 7 you likely have self-employment tax due. (Generally)
If you get a 1099 for SPIFFS, that number should be in Box 3. SPIFFS are not subject to self-employment tax.
Box 7 or box 3 if it's a spiff it's not subject to self-employment tax. Three other tax accountants disagreed with me. The IRS however agreed with me  Now some people who do taxes for a living are good at what they do and are caring people who go above and beyond for their customers (Yes I would put you in that group bro) and others are snake oil salesmen. You know kinda like people in the auto industry lol
I AM ALWAYS RIGHT... except when I am wrong.
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Quote:
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Let me ask you a simple question Willie. If you get a 1099 misc form and your in the Auto business do you have to pay self employment taxes on the income?
It depends on which box the number is in. If the number is in Box 7 you likely have self-employment tax due. (Generally)
If you get a 1099 for SPIFFS, that number should be in Box 3. SPIFFS are not subject to self-employment tax.
Box 7 or box 3 if it's a spiff it's not subject to self-employment tax. Three other tax accountants disagreed with me. The IRS however agreed with me Now some people who do taxes for a living are good at what they do and are caring people who go above and beyond for their customers (Yes I would put you in that group bro) and others are snake oil salesmen. You know kinda like people in the auto industry lol
You/we are correct about the SPIFFS...however, if the SPIFF amount is in Box 7, the IRS will/may assume that it is self-employment related (they won't know that it's a SPIFF regardless of which Box it's in.)
Some tax preparers don't know that SPIFFS are not taxable for self-employment (which they should)...some guys won't 'buck' the Box 7 reporting (they are too lazy or afraid to deal with it if the IRS sends a letter)...some guys just don't care (they were originally trained to sell cars  ).
I like to tell people that when using a paid preparer, it's not about the papers you get on April 15th. It's what goes into those papers and having someone on your 'team' year around that is the value. Some preparers simply don't behave like that...some do. I'd say 90% of new clients save money by paying me rather than dong it themselves...there is a lot to know and understand that is hard to deal with when you only do it once a year.
I have several clients with relatively simple returns. They typically pay me $275-$300 per year. Many times I save them that kind of money, but I don't make a presentation about it. They 'get it' and get why they come to me. If they have a simple question - or several - throughout the year, I don't gig them with a bill...that's just the deal I prefer to provide.
Most of those people have something unusual come up at some point in time and end up saving a lot more (by having me do the return) than they cumulatively paid me over the years...or since the last time they had something unusual to deal with.
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