4th Quarter 2010 Estimated Taxes Deadline – January 18th
If you have extra income outside of your W-2 paycheck in 2010, this is a reminder that the deadline for 4th Quarter 2010 estimated tax payments is Tuesday, January 18th, 2011. (Updated: January 15th falls on a Saturday, and the 17th is a federal holiday.) Estimated tax payments help you make sure Uncle Sam gets his share of income that doesn’t automatically withhold taxes. This is the last chance for 2010, otherwise you may be hit with taxes and penalties by the time you file your tax return.
According to IRS.gov, generally you must pay estimated tax for 2010 if both of the following apply:
- You expect to owe at least $1,000 in tax for 2010 after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of;
- 90% of the tax to be shown on your 2010 tax return, or
- 100% of the tax shown on your 2009 tax return. Your 2009 tax return must cover all 12 months.
Need help estimating how much tax you’ll owe? Try the new TaxCaster widget from TurboTax. It’s free and designed to estimate your refund, but that also means it estimates your potential tax bill as well. Since an estimate is all you’re looking for, I found the tool quite handy. Be sure to enter all your extra income in the Total Income section:
How do I pay? You can pay estimated taxes using the 1040-ES mail-in voucher or online at EFTPS.gov.
By Jonathan Ping | Entrepreneurial, Self-Employment, Taxes | 1/13/11, 5:00am
January 13th, 2011 at 6:40 am
Actually, it’s the 18th. Monday is MLK day.
January 13th, 2011 at 9:35 am
Thanks for the heads up. I need to get on this because for some reason my employer withheld too little from a bonus I received at the end of the year and I know I’m going to end up writing a check in April. In order to avoid and penalties I’m going to go ahead and send in an estimated tax payment.
January 13th, 2011 at 9:44 am
Also, you do not have to make the January 18th payment if you file your 2010 tax return by January 31 and pay the entire balance due with your return.
January 13th, 2011 at 10:00 am
Great. I just tried to enroll in the online payment system to make my prepayment online and at the end they said they’d send me my PIN in the mail within 10 days. I need said PIN to make a payment in the system. I guess I will have to mail in my payment and hope it gets there by Monday. I doubt I will get my return done by the end of the month because the 1099s never come in very quickly.
January 13th, 2011 at 10:17 am
Did anyone else notice that on the Tax Caster widget there is no place to enter 401k data that is taken out of your paycheck? It way over estimated my tax owed.
January 13th, 2011 at 12:20 pm
@Jody – Good catch! Updated the post.
@Andy H – I didn’t know that, interesting. Although it’s tough to file by 1/31.
@Andy – I agree, filing by January 31st is unlikely since I think that is the mailing deadline for most 1099 forms in the first place, and brokers often revise again in February.
I’m pretty sure the 1040ES deadline is simply by the date of postmark. So you just have to have it postmarked by 1/18.
@Tanya – According to their FAQ, if you made pre-tax 401k contributions then your W-2 income being input should already be reduced by that amount.
January 13th, 2011 at 12:48 pm
Also keep in mind that the IRS has already stated that they will not accept returns that are affected by the Bush tax extender bill that was signed on 12/17 until at least mid-February. This will include most filers. So if you’re planning to file by 1/31, you may not be able to, and you will have missed the 1/18 deadline.
January 13th, 2011 at 2:51 pm
FYI:
If your prior year’s Adjusted Gross Income was greater than $150,000, then you must pay either 90 percent of this year’s income tax liability or 110 percent of last year’s income tax liability.
If it is under 150k then you can 100 percent of the previous year.
January 13th, 2011 at 6:13 pm
Just checking to see if anyone out there is set up as an s-corp and found the tax tool to overestimate their amount owed — I think this is driven by the fact that it’s double counting the self-employment tax.
If I understand everything correctly, the S-Corp – with a regular payroll process – submits the appropriate FICA amounts (employee and employer) to the government on a regular basis based on the salary paid to the employee. Since the S-Corp is already covering FICA, the self-employment tax does not incrementally apply:
http://taxes.about.com/od/scor.....ayroll.htm
This calculator doesn’t have the flexibility to elect “s-corp” status, so it’s taking the salary you report and multiplying by a % to compensate for the self-employment tax (FICA), ie double counting.
Anyone else find that to be the case?
January 13th, 2011 at 9:35 pm
what if I paid 110% of last year with this year AGI higher than 150k but come up short due to bonus and stock sales. Do I still need to make a payment by the 18th or I meet the no penalty criteria for April?
January 13th, 2011 at 10:04 pm
With the Roth conversion I did in 2010, I’m so not looking fwd to doing my taxes this year…
January 14th, 2011 at 5:40 am
Anupam: My understanding is if your previous year was 150 or higher and this year you paid 110% of your previous years liability there will be no penalty as long as you pay by April.
January 14th, 2011 at 6:16 am
thanks Mike
January 14th, 2011 at 8:17 am
Robert – I’ve toyed with the idea of a roth conversion for savings from old 401ks (rolled to traditional iras), but being in a higher tax bracket (33%), so far have decided against it. Given how many unknowns there are, without a crystal ball the only reasoning we came up with that might justify it would be to “hedge” taxes (ie, try to get 50% of our retirement in pre-tax investments and 50% in post-tax).
Would be curious what analysis you did and how you came to the conclusion to do the Roth conversion…
That being said – it hurts now, but just wait till you take out of that tax-free when you’re all retired and ready to lay on the beach.
February 8th, 2011 at 11:05 am
I pay my estimate tax 2010 with the vouchers. How can I prove it? Where do I find out the information