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Kiplinger's financial advisors explain the pay as you earn tax system.
Tags:How the Pay As You Earn Tax System Works,avoiding tax penalties,kevin mccormally,kiplinger,paying tax correctly,paying your tax estimates,tax payment tips,tax payments
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I’m Kevin McCormally of Kiplinger’s to talk about the special tax burden of the self employed. The federal income tax offers on a page you earned basis. Sure with tax return to do April 15 but Uncle Sam isn’t willing to wait until them to collect. Anyone who is ever had the job and those with employers required to withhold income and to security taxes from there workers paychecks and the same that money to the IRS every payday. But what are about the millions of American who are there own bosses the self employee. Will the IRA expects them to make greater payments too during the year. Not every payday but four times a year on April 15th, June 15th, September 15th and the following January 15th. If you don’t kick in at least one fourth of what you often year by each deadline you can be penalize her exception of course for example you generally never have to paid more an estimated tax to the amount of tax you oath for the previous year. And folks rather a job as an employer E as well may have way to avoid making us to be the payments. You can ask your boss withhold of worth of your paychecks to cover you estimated tax liability. For figure whether you need to make us to pay the tax payments and to pinpoint how much you should pay get the copy of IRS form 1040ES from irs.gov. you can make the payments by check or to make sure you never missed the deadline arrange to have the IRS to your bank account on the due date by using the electronic federal tax payment system.