Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at firstname.lastname@example.org with the subject line “Ask an Accountant”. See previous questions and answers HERE
I have an at home business that has started making me a small amount of income. Should I be paying estimated taxes on what I am making?
You need to pay in at least 90% of your prior year tax through withholding and estimated payments by January 15th. If your income is expected to be the same as last year and more than $150k, then you need to pay in at least 100% of last year’s tax. If your income is higher than last year and greater than $150k you must pay in 110% of last year’s tax by January 15th. Now is an excellent time to discuss year end taxes with your accountant.
*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.