Florida corporate estimated tax payments are used in accordance with the state's pay-as-you-go tax system. Most times, we think of the term "payroll" when we think of withholding. However, there are other ways withholding can take place, such as through Social Security payments. A lot of people also don't realize that there are many income sources that are not subject to withholding. A person who is self-employed does not have any type of withholding automatically deducted from his or her income. Alimony also does not have any type of withholding. Still, some forms of income require taxes to be paid, and prepaying taxes is an excellent way to meet this requirement.

Who Can Use Estimated Tax Vouchers?

Some people will use estimated tax vouchers to make tax prepayments. These vouchers are not limited to those who are required to pay taxes but don't have any type of withholding. In fact, there are a variety of situations in which tax vouchers can be of benefit. Take for example a person who receives bonuses or commissions. These payments distort income and can make it difficult to determine how much needs to be paid in taxes. With tax vouchers, though, estimated payments can be made to offset a large tax payment come tax time.

Does a Person Have to Make Estimated Tax Payments?

It is not mandated by law for a person to make estimated tax payments. But if you end up owing a large amount of money come tax time, you could be hit with a penalty for underpaying your taxes throughout the year; this applies to people who have withholdings as well as those who don't. This is why it's best to use estimated tax payments as a way to avoid this penalty.

The penalty itself is an interest penalty and it is nondeductible. It is calculated on a quarterly basis. Prevailing interest rates largely impact the quarter-to-quarter interest rate. Over the past decade, the penalty has been as high as 8 percent. They've also been as low as 3 percent. As of now, they stand around 4 percent.

Understanding Estimated Tax Payment Dates

If you are going to make an estimated tax payment, it will be due on the 15th day, whichever day that falls on, after the end of the prior quarter. This means you have 15 days to calculate what you owe and make a payment. Not all tax quarters are the same in length.

The first and third quarters are three months long, the second quarter is two months long, and the fourth quarter is four months long. They are as follows:

  • January-March
  • April-May
  • June-August
  • September-December

If you are going to make all of your estimated tax payments at once, it is due April 15 of each year. If you want to make payments in installments, the first-quarter payment is due April 15. The second-quarter payment is due June 15. The third-quarter payment is due on Sept. 15, and the fourth-quarter payment is due Jan. 15 of the following year. If you file and pay your owed taxes in full before Jan. 31, you can skip the Jan. 15 payment.

If one of the due dates mentioned above happens to fall on a Saturday or a Sunday, the date the payment is due will be on the following business day; this applies if the payment due date is on a federal legal holiday. And if you happen to miss making a payment on the date it is due, you should make a payment promptly.

It is not uncommon for people to become confused about the payment that is made in January. They think it applies to the current tax year, when it actually applies to the prior year.

Special Exceptions for Estimated Tax Payments

Some people qualify for special exceptions. Take for example the Farmers and Fisherman Exception. If at least two-thirds of their gross income comes from farming or fishing, they can either file and pay their total tax liability before March 1, or if preferred, they can pay all of their estimated taxes by Jan. 15. It's up to them.

There are many other exceptions that may apply. You need to learn about these exceptions to help plan for your estimated payments. More importantly, it helps you avoid the penalty associated with underpaying your taxes, and it can even help you minimize the number of payments you have to make in advance.

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