IRS mailed me a Form 1040-ES/V (OCR) for 2009

and I have no idea why ?

Do you need to make estimated income tax payments for next year?

Were you significantly under-withheld this year?

Are you self-employed or do you otherwise routinely receive compensation from which no tax is withheld, such as income from rentals or investments?

You probably owed taxes year last.

You don't have to be self-employed to make estimated quarterly payments.

I wish they would mail me these OCR forms every year.
Sometimes I get them (like this year) and other times not.
I have been self-employed and making estimated quarterly
payments for 20+ years. After 80+ payments made one would
think they would figure out I needs the forms EVERY year !

I just toss it in the garbage, or use it as scratch paper.

goldsheet said: I wish they would mail me these OCR forms every year.
Sometimes I get them (like this year) and other times not.

Some here. Got them this year but not last year, but did get them the year before that. I would like CA to send me the 540 ES forms pre printed as well but have never gotten any state ones. Makes it convenient and saves me the time from making up the forms and envelopes.

goldsheet said: I wish they would mail me these OCR forms every year.
Sometimes I get them (like this year) and other times not.
I have been self-employed and making estimated quarterly
payments for 20+ years. After 80+ payments made one would
think they would figure out I needs the forms EVERY year !

Why you are wasting money on checks and stamps when you can do it at https://www.eftps.gov/eftps/

If you owe more than $1000 in tax year 2008, you need to adjust your withholding or make estimated payments. If you don't correct this, they will charge you an underpayment penalty.

There are two safe harbors- one, for 2009, withhold and/or make estimated payments equal to 100% of your 2008 tax liability. If you still end up owing money, the service won't charge you a penalty.

The other safe harbor is to estimate your tax burden for 2009, and withhold or make estimated payments equal to 90% of that. (This is tricky- when you're doing your 2009 taxes in 2010 and it turns out your withholding is less than 90% of the final number, you're getting hit with an underpayment penalty).

I think making estimated payments is easier than adjusting withholding, but that's just because my HR is incompetent. Using eftps.gov is a breeze.

svap said: Why you are wasting money on checks and stamps when you can do it at https://www.eftps.gov/eftps/
Was not aware of it, so thanks for the information.
I have been paying my California taxes using WebPay
Should have used this in 2005 when my estimated payment ended up in San Francisco Bay
Now I have to decide what to spend the $1.68 saving on

P.S. Decided to "do the math" - Get about 25 cents per day interest on my
estimated tax payment, so if it takes 2 days to clear I make more than the postage.
Now looks like mailing a check is actually cheaper ??

oopsz said: If you owe more than $1000 in tax year 2008, you need to adjust your withholding or make estimated payments. If you don't correct this, they will charge you an underpayment penalty.

So, if you owe too much (over $1k) over the course of the year you are subject to penalty fees for underpaying. Does anyone know if you are subject to underpaying if you pay make one lump sum payment late in the year instead of making their recommended payments throughout the year (I think it's four times)?

In the interest in making interest off my money for as long as possible, it would be beneficial to make the one lump sum payment as late as possible.

Drinyth said: ...So, if you owe too much (over $1k) over the course of the year you are subject to penalty fees for underpaying...Not necessarily true. You may have paid estimated taxes equal to the prior year's tax liability, but because of an increase in taxable income, you may owe more than $1,000 and yet still not have to pay a penalty.

mailvips said: goldsheet said: I wish they would mail me these OCR forms every year.
Sometimes I get them (like this year) and other times not.
I have been self-employed and making estimated quarterly
payments for 20+ years. After 80+ payments made one would
think they would figure out I needs the forms EVERY year !

Hi Goldsheet/Svap

I became a 1099 (self employed) contractor October last year (in CA) and most probably will have same tax status thruout this year and hence will have to pay estimated income tax and self employement taxes. From the previous posts it seems that an electronic way is to use eftps for federal and webpay for CA.

But the question I had was can I pay social security and medicare taxes (or self employment taxes) thru eftps?

Thanks in Advance!

Never mind, I checked efpts and it seems that I can pay any kind of payments related to any kind of taxes on efpts. Kindly correct me if I am worng.

Thanks

I feel like this is an obvious question, but 2008 was the first time I made estimated payments (as I started doing contract work in 2008).

My 2009 income has dropped by almost 50% from this time last year. Do I have to make the same payment amt. every quarter, or if I see this trend continue as 2009 goes on, can I pay less with each quarterly payment?

I received the 1040-es slips for the 1st time. I am no longer working at my job I was laid off in January and am now on unemployment, am I still expected to pay these vouchers and if so is there a penalty if I don't pay them on time? I am already a quarter into the year and no where near my wages from last year. And besides I got a severance lump sum from my old employer in January and they took way more in taxes than what they are asking with the 1040-es slips combined.

slorocks said: I received the 1040-es slips for the 1st time. I am no longer working at my job I was laid off in January and am now on unemployment, am I still expected to pay these vouchers and if so is there a penalty if I don't pay them on time? I am already a quarter into the year and no where near my wages from last year. And besides I got a severance lump sum from my old employer in January and they took way more in taxes than what they are asking with the 1040-es slips combined.The mailed 1040-ES forms are a courtesy. Just because you receive them doesn't mean you have to pay estimated taxes - and just because you don't receive them doesn't mean you aren't responsible for making estimated tax payments. It all depends on your individual situation.

Its impossible to give an answer to your question given the lack of details; how much taxes you will owe on the work you did in January will also depend on how much you earn between now and the end of the year. That being said, if you expect to be unemployed for a while then I doubt you will need to make any estimated tax payments as the already withheld amt is probably more than sufficient since they tax based on the presumption that you continue to earn at that rate for the whole year which isn't true in your case.

unknown4179 said: I feel like this is an obvious question, but 2008 was the first time I made estimated payments (as I started doing contract work in 2008).

My 2009 income has dropped by almost 50% from this time last year. Do I have to make the same payment amt. every quarter, or if I see this trend continue as 2009 goes on, can I pay less with each quarterly payment?
You should read Chapter 2 of Pub. 505 - look for "annualized income installment method." Basically, with each payment you need to have paid the appropriate amount as if your income year-to-date would continue for the rest of the year. If you wind up paying more towards the end of the year, you'll have to fill out Form 2210 to show you were paid up appropriately throughout the year.

If you're going to do this, I recommend reading the instructions for Form 2210 first, so that you'll know what to expect and what records to keep.

I have received the same form. Lets say from my salary, enough tax is deducted (about same as this year tax) but later this year I end up selling some items on eBay that will yield me 4K-5K profit (Yes I do declare my eBay profit!). How do one go about paying tax on 4-5K profit when sale has not yet occured or might not even occur?

dealhunter999 said: I have received the same form. Lets say from my salary, enough tax is deducted (about same as this year tax) but later this year I end up selling some items on eBay that will yield me 4K-5K profit (Yes I do declare my eBay profit!). How do one go about paying tax on 4-5K profit when sale has not yet occured or might not even occur?You owe the estimated tax payment for the quarter when the income is earned. So if for instance you do all your eBay selling Oct-Dec then you can make an 4Q estimated tax payment only (due Jan 15th), you don't have to make equal payments if the income does not occur throughout the year.

What you can't do is earn income all year and then make one big 4Q estimated tax payment to cover it all - that will result in you getting a penalty, even if you overpay and expect a refund.