Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Tax Deductions and other Taxes topics.
H&R Block Tip: You will need to estimate your taxes if, for instance, you are self-employed or make large gains on your investments. In this case, you pay the IRS 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 tax filing deadline date, 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! Consult a professional tax preparer if you have questions on estimating your taxes.