so back when i was unemployed i didnt bother filing tax’s. no big deal
the last job i had b4 that i was sales and i was considered an independant, the company was not responsible for taking out any tax’s, i had to do all my own accounting
thats fine, im perfectly capable of setting aside my own tax $
my tax guy gets all on this kick about me sending him my tax $ on a quarterly basis … basicly he wanted my money in HIS account
i told him no effin way, i like using my money to make me more money when possible, be it interest in my bank account or buying stuff to resell (or fix / resell)
well come december i quit that job and became unemployed for a bunch of reasons all at once. i didnt make any money that wasnt included on the taxes that got filed for that year.
APPARENTLY the fucker some how got me marked down in the IRS’s books as oweing at least one of those quarterly tax payments. I got a letter from the IRS basicly saying that i better pay them their $
if that shithead doesnt straighten this out … ugh … i dont even want to think about how pissed ill be
cliffs: stupid tax guy has stupid idea that gets me on shitlist with the stupid govt’ tax guys
i wouldn’t sweat it that much, the IRS takes for fucking ever to collect & charge interest. I accidentally fucked my taxes up one year and it took them over a year to send me a letter, I didn’t owe any interest either.
Did you get a federal refund last year, or did you pay in?
If you got a refund that should be one of the loopholes to get out of paying quarterly estimated tax. It’s the one my tax guy used for me in 2006 when I did over 30k in 1099 work. It did suck cutting a monster check to the government at the end of the year though.
I did have to make an estimated tax payment to the state though since in 2005 I had to pay something like $50 back to the state.
why do I suspect the accountant was trying to get you to pay quarterly (which you had to do) but you didn’t understand that and thought you could pay it all at the end. then you didn’t pay and now the IRS wants their money.
why do I suspect the accountant was trying to get you to pay quarterly (which you had to do) but you didn’t understand that and thought you could pay it all at the end. then you didn’t pay and now the IRS wants their money.
i was blatently told it wasnt required and that it was more of a courtesy, therefore i denied. i beleive his words the first time it was brought up were “what im going to do to make your taxes easy for you next year …”
but that doesnt matter because i was unemployed before that first quarter started, there was no money to pay taxes on, therefor i didnt send in any payment
hell, HE KNEW that i was unemployed before day one of that quarter … i was unemployed well before day one … and he also knew that my next job would NOT be one where i was an independant and therefore wouldnt have a need for that service
and every time ive ever filed tax’s ive gotten money back on federal, and onle once have i had to pay the state ($35 or such, and that was like 2002 i think)
-what im going to do to make your taxes easy for you next year …blah blah … quarterly payments… blah blah …
so do i have to send in these payments ?
-well … no … but it will make things easier next year
well the im not going to do it, i dont even work there anymore, and im not going back into sales. the next job i have ill be on payroll anyways, so theres no need for this
-oh ok
Tell them to audit you and fight this. If you have proof you did not earn anything, your and your property does not exceed your lifestyle. Why would you have any issues, make sure to explain to them what this “tax guy” tried to set up.
I am a freelance designer so I have looked into this extensively. I’m gonna keep this pretty basic.
You may have to pay estimated quarterly if:
You owed the government over $1000 in the previous year. Its obvious from that that your withholdings from your paycheck are not covering what you owe the government - therefore, they want you to make estimated tax payments during the year to make sure you are paying what you owe AS YOU GO ALONG, not all in a lump sum at the end of the year.
However, many accountants (I know this first hand because I worked at an accounting firm for several years), like to set up their clients to do estimated taxes regardless of how much they owe at the end of the year. Like HRK said, to help them out, because some people freak out when they owe at the end of the year (I once saw this guy who owed over 40k between state and federal, and he had no idea why, lol).
If you have a change in employment where you KNOW your withholdings are not going to be enough for THAT TAX YEAR, you are required to start paying quarterly taxes. When I switched freelance (aka, no taxes are withheld) I was required to start making payments, because the government is not getting any money from me. In other words, this part is NOT based on previous years taxes.
However, there is also the Safe Harbor rule which basically says that so long as you pay THIS year the same amount to the government as you did LAST year (regardless of how much you make) you are not required to do estimated tax. You can just owe at the end of the year.
So I don’t really understand your situation 100% because your kind of rambling between a bunch of posts…but hopefully this helps a little.