First quarterly payment of estimated tax for 2007 was due April 16; I just sent it yesterday. Will the IRS fine me or something?
Maybe... but it's not worth worrying about.
No doubt when you least expect it - perhaps even months from now - there will be a notice from the IRS. The penalty for late paying runs at 1/2% of the amount owed for each month or part of month the payment is late.
I was told by a former IRS worker that if it's an individual or small company to put a note in with it...saying something like "I'm sorry, I really try to keep up with this stuff, I don't have a bookeeper and have never been late before." She said that the "office policy" was to forgive one late payment.
I had a late payment after she told me, I wrote the note and I never heard anything from them. Think they can actually be human once in a while:-)
My husband does this every couple of years. He always forgets the tax payment that is due in June because he thinks he should have 90 days between payments and there is only 60. I think he only had to pay a penalty once. When he did this last year nothing happened. I really don't see why you should have to pay a penalty on an estimated tax payment. Your taxes really aren't due until the following year, but the government wants it early. Just another was for Uncle Sam to stick it to you I guess.
Thanks, everybody. Since it's too late to enclose a note w/ the payment -- which would really be like eating nails anyway -- I just won't worry about it.
The way I understand it, the taxes are due in the quarter in which you make the money, you just don't "settle up" with final numbers until April of the next year.
DH is "employed" and has taxes taken out. I am "contracted" and don't get taxes taken out and have to pay both halves of my Social Security. What we do to help save the tax money is have zero deductions on the DH's paycheck, so he pays oodles of money in taxes. I have always made estimated tax payments. Two and a half years ago I got a contract position where I started making significant money for a change. I don't remember when I started skipping the first quarter payment, but it was several years ago. I figured that the payroll deduction from DH's check made up at least a quarter of what I owed, so I just kind of ignored that first quarter.
2005 tax year, I didn't make the first quarter payment, but because it was the first time I had an entire year with the high pay, nothing was said. In 2006, however, the tax software figured that I owed the IRS $22 for not making that first payment. And that is with a combined income that made me worry that we might fall victim to the Alternative Minimum Tax monster, too!
My point: I would not worry about sending it a day late, and if you do get dinged for it, expect an insignificant penalty.
Nancy, thanks for sharing. I'm not sure about the taxes being due "in the quarter in which you make the money." But then, I don't really understand much of anything about taxation.