The tax circle never ends, and you can take that to the bank or, more correctly, send some money to the IRS.
April 18 marks the date that 2021 IRS tax returns are due for most taxpayers, and April 18 marks the date that the cycle begins all over again for 2022.
The Internal Revenue Service has sent out word that those who make estimated tax payments, such as self-employed individuals, retirees, investors, businesses, corporations, and others that the payment for the first quarter of 2022 is due Monday, April 18.
This will be their first quarterly tax payment.
Income taxes are a pay-as-you-go process. This means, by law, taxes must be paid as income is earned or received during the year. Most people pay their taxes through withholding from paychecks, pension payments, Social Security benefits, or certain other government payments, including unemployment compensation.
So those who are self-employed or in the gig economy need to make their own estimated quarterly tax payments.
Similarly, investors, retirees, and others often need to make these payments because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony, and rental income. Paying quarterly estimated taxes will usually lessen and may even eliminate any tax penalties.
Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers and fishers, casualty and disaster victims, those who recently became disabled, recent retirees, and those who receive income unevenly during the year.
If you have questions about your tax return. Call now to consult with a tax professional.
A tax professional can also help you understand how certain tax deductions are changed for 2022.
Disclaimer: Alan Mendelson is a well-known TV consumer news reporter who reports on tax issues. You should seek professional advice if you have tax questions or issues.