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October 27, 2006, Newsletter Issue #38: Estimating Your Taxes
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Tip of the Week
You will need to estimate your taxes if, for instance, you are self-employed or make large gains on your investments. The IRS wants its money every quarter instead of waiting for a yearly return to be filed. When a company pays your wages you do not have to worry, but if you are self-employed, you must estimate social security, Medicare taxes, and income taxes every quarter. If you try to postpone the estimations until the dreaded April 15th, the IRS will charge penalties and interest. Beware - if you do not estimate your taxes correctly you will receive a penalty even if money is due you!
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