IMPORTANT CHANGE TO PAYING ESTIMATED TAXES
Last year the amount of Estimated Taxes a small
business proprietor was required to pay, was based
on 90% of the prior year's taxes.
That's now history.
For 2010 you must pay an amount
equal to 100-110% of last year's taxes.
Last year the amount of Estimated Taxes a small
business proprietor was required to pay, was based
on 90% of the prior year's taxes.
That's now history.
For 2010 you must pay an amount
equal to 100-110% of last year's taxes.
Based on the above, if I had an tax income of 12,000 in the business I would have to pay an estimated taxes for the quarter on that amount or based on last years yax return where I got a 4,500 refund ??
The amount of refund you got last year is irrelevant. What IS relevant is
how much you PAID in taxes — i.e., total amount paid-in, minus amount
refunded to you.
For example, if, last year, you paid $11,000 in taxes, and then later you
got a refund for $4500 (of the $10,00 paid in), the amount you paid in taxes
would have been $6,500.
In that case, this year you would have to pay quarterly, either (a) 1/4 of the
amount of taxes you expect to owe during this year, or (b) 1/4 of the amount of taxes you ended up paying last year ($6,500 in the example above).