The Social Marginal

It’s one of my four favorite days of the year, that magical day when money seems to mysteriously hop out of my piggy bank and dance over to the piggy bank of the IRS and state taxing agencies, it’s April 15th and your Q1 Estimated Taxes are due today if you are on a standard year fiscal calendar.

Whether or not you have 1099′d or other self employment income to document, remember that paying estimated taxes is often the best way to bring your tax liability as well as your return next April as close to Zero as possible (what everyone should strive for).  If you don’t pay enough, you’ll pay penalties next April, and if you pay too much, you’ve lost the dividends that would have been earned on that money if it were in your own control.  So talk to your tax professional or consult online resources to figure out your tax rate and what your employer will be pulling out at this time, revise your W4 if necessary so that you’ll come up short on the taxable amount for the year (but as close as possible), and then file your 1040ES and whatever your state form is for estimated taxes each quarter along with your payment to make up the difference.

Remember, not paying and not getting anything back on your annual filings should be your goal.  A refund is just a zero interest savings account for the irresponsible, especially if you rely on it every year as many Americans seem to these days.  If you’re intelligent enough to be browsing blogs on the Internet, you’re intelligent enough to manage your money now rather than letting the government hold onto it for a year for you.

Tags: estimated taxes

This entry was posted on Tuesday, April 15th, 2008 at 6:58 am and is filed under Money Matters. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.