We're an S-Corp. Any profit made by the company is put on my personal tax return.You mean people who get a paycheck, or people who own their own company and their corporate earnings are their income? From my basic understanding, those are two very different things tax-wise.
I've thought about estimating that for my entire business, INCLUDING the taxes that I and all our employees personally pay. Then I get depressed and stop before I'm finished.Just for fun, add up your State and Federal taxes, Local Government charges and all those other Government owned entities which charge you for their "services" and see how much they are collectively sucking out of your business.
For 53% of us, that is true. Like Eric says, it's when. The key is noyhow much a 'refund' or 'payment' but if your percentage of 'taxes due' changed.I always have to pay,
Maybe I'm misunderstanding, but I interpret that as you having to pay a penalty. Unless your net income is virtually 0. In which case "congratulations". Or "sorry".I always have to pay, because my money will stay in my pocket until the government takes it away.
I never pay penalties, or estimated payments, and no my net income is not zero, if it were I would be doing something elseMaybe I'm misunderstanding, but I interpret that as you having to pay a penalty. Unless your net income is virtually 0. In which case "congratulations". Or "sorry".
Don't do an underpayment, unless you want to pay the penalty for underpayment.[form 2210]On the thought of keeping your money. Wouldn't be a bit smarter to underestimate your taxes, and put the difference from withholding and what you will owe in an interest bearing account for the year? Tax filings aren't "due" until Jan 1 of the following tax year and generally aren't penalized or bear interest until after the April 15th deadline. The payment of any unnecessary withholding allows the government access to free money up to a year in advance of it being accounted for. Underpayment could provide you with the use of that money, but you have to plan on paying it eventually, and in a timely manner to avoid costs. Of course, this would be a fool's errand to argue the point with an IRS auditor, but still...
Back to the question. The answer isn't money back or money owed, it is the ratio of taxable earnings to taxes by an annual comparison. This gives you a percentage figure that has a meaningful answer about your income and changes in the tax code. This is where the money spent with a CPA proves valuable.
I was paid as an independent contractor for a number of years a while back, even though I was probably really an employee although it is debatable.Don't do an underpayment, unless you want to pay the penalty for underpayment.[form 2210]
After you do your taxes this year, calculate the minimum you need to withhold without incurring a penalty. [for 2019 tax estimates, it is based on what was due in 2018]. Make sure you pay that minimum each quarter, then if you make more, fill out the form 2210 next year and you won't have a penalty [some exceptions if you have really high income].
I haven't got my personal taxes back yet, but on the bill for our S-Corp taxes our accountant noted as part of what they did "review Tax Cut Act 20% business income deduction calculations". I did a search using that terminology and found the following:My brother got his taxes back and we noticed 20% of his K-1 earnings were not taxed.
There may be some exceptions, but as I understand it, as long as you pay 100% of your previous years' liability, or 85% of the current year liability there should be no penalty. You DO have to pay at least 1/4 of the amount by each of the deadlines. You can't pay 24%, 26%, 25%, 25%, although you could do 26-25-25-24.I owe a small penalty because I underpaid my estimated quarterly taxes in 2018. I'm paying the IRS before the tax is due. I don't see how I can be behind on something I paid ahead.