How to Avoid the Estimated Tax Penalty in 2023

[@kermitshamburger774]

Thank you. This was great information. I'd bet more than 70% of " New Small Business Owners " have no idea about this quarterly requirement. You all provide amazing and extremely informative content in a very professional manner. . . Keep up the great work!

[@LYFEAccounting]

Hoping more learn this, thank you so much for the incredible comment!!

[@wildbill7267]

I am a W2 employee. Unfortunately, since the 2018 “tax cuts” I now have to estimate because the W9 system does not take out enough anymore. The $10k cap on deducting property tax is a joke. I pay more tax now and the standard deduction is slightly better than itemizing. I have contacted both my senators and my congressional representative to complain. I wish more people would do so as well so we can fix this nonsense that places an undue financial hardship on middle class homeowners

[@joebauer174]

You get right to the information and you illustrate very well how to make the calculations for a small business. Every new business owner should watch your video!! Very well done and you are easy to listen to. You are a video illustration expert!!!

[@LYFEAccounting]

Your comment means a lot, thank you, Joe!

[@Bgbc152]

Love all of you guys at Lyfe! A big thank you for cramming so much info into your vids and keeping them to the point and understandable for non-tax people!! 😅😊

[@TechnoGlowStick]

8:27 "So remember this, whatever that you overpay in taxes, the government will send you a refund for that amount." That's a great Idea! I was worried, that if I ever owed more than a thousand dollars in taxes, I would underpay one of my estimated quarters. But I could just over pay one of my quarters to eliminate the fear of under paying. That's a great solution! 😃

[@LYFEAccounting]

Exactly, the last time I overpaid my estimated taxes. I got a big refund check the next tax season

[@lashere]

Thank you! So helpful and well explained. I’ll be saving this video to reference for years to come

[@WootNyllon]

Why did you not subtract his expenses before calculating self employment tax? I thought it was done the same way as Federal in that case?

[@sepulvedaventuresllc712]

Probably because of that standard of 92.35% total income / by 92.34% is what your taxes on self employment.

[@rtanaka]

Excellent video! I just had a question about my estimated tax payments and was hoping y'all had made a video on this topic!! Thank you.

[@LYFEAccounting]

Glad it was helpful, Let me know if you have anymore questions

[@rtanaka]

@@LYFEAccounting I appreciate the offer. I'm puzzled as to why these estimated payments are necessary- I paid estimated tax payments for 2020 every quarter and I always received a full refund. Is it just a matter of the government needing help with cash flow? This year, my federal and California taxes were X and Y and I'm set to pay approximately 1/2*X and 1/2*Y in estimated payments for 2021. Since the government won't receive my tax filing until April 15, 2022, how would they know if I'm way over or under paying my estimated payments? Could someone pay zero for Q1, Q2, & Q3, and then pay all the extra in the Q4 payment? I'd be happy to pay your team for assistance in answering these questions. Ryan

[@charleschen4766]

Thanks Sean for the helpful video. I want to do Roth IRA conversion this year from my IRA stock holdings when the market is in correction. So my income will be much higher compared to the last year. Can I pay the Roth conversion tax when I file the tax return in April 2023? Can I pay the quarterly tax payment using the safe harbor rule, that’s to pay 150% of my tax liability of the previous year 2021 to avoid underpayment penalty?

[@crownedonestep]

Thank you! Very informative channel 😊

[@rigo6156]

The taxable income was $462,132 and the estimated tax penalty was only $2,800 Yeah I'll just hold on to my money and make more money.

[@tjharahan7878]

Hey Sean, great video. One question for you if you don't mind. I'm looking at the math section for the taxable income/brackets it looks as though you're taking the % (from the tax bracket you're in) and running that through your taxable income. The question I have for you is, how did you get $7,518.50 from 22% on $57,800? Wouldn't that be $12,716? Any clarification on this would be extremely helpful so I can move onto the next step of your video! Thanks again.

[@LYFEAccounting]

Thanks for watching TJ, hope you’re subscribed! The brackets are rolling scales, so for example if you make $57,800 on the first ~ $10,000 would be taxed at 10% leaving $47,800 for the next bracket. Does that make sense?

[@kpk1014]

@@LYFEAccounting I was wondering about estimated quarterly tax payments for the IRS in regard to traditional IRA withdrawals. I'm 61 years old. I had no taxable income last year. I am single. I'm about to withdraw $107,050 from my IRA. I'm going to withdraw it in Late July maybe early August. I'm using the money towards the purchase of a house. I did own a house just weeks ago, but my former husband received the house in our divorce settlement. I understand the tax on that will be $34,647.50. My question is can I wait until the new year to pay the tax, or do I have to do quarterly or estimated tax payments, which I guess are the same thing from my understanding? If I do have to do quarterly or estimated taxes I was thinking of waiting until around January 11th, 2023 to pay it if the penalty and interest is less than what the taxes would be on the additional funds I would need to withdraw from my IRA to cover the taxes. TY

[@litjhitjay5243]

I like this jawn , thanks for the free help

[@LYFEAccounting]

You're welcome, thanks for watching!

[@dilfuzaibragimova4495]

Bro I love this page ;-;

[@Layla-df7hp]

Thank you so much for your videos! I have a question: I haven't even started my business yet and don't know what my yearly income will be, all I know is it depends on pretty variable sales. Can I do these estimated tax payments based on my actual income every quarter throughout the year? For example, can I calculate my taxes from my actual sales from June 1 - Aug 31? I have no idea how much I will make for the whole year.

[@kaycali4912]

Can you make a video on annualized tax payment installments?

[@janineweathersby]

This is really helpful. Thank you Shawn.

[@LYFEAccounting]

You're very welcome!

[@gabrielchirino-melgarejo4313]

Thank you Shawn this was awesome

[@dennis959]

Hay that was a great video. 1question, while making on of my quarterly payments I accidentally sent my payment to “Payments” instead of “Quarterly Tax Payments “. How can I fix this?

[@sepulvedaventuresllc712]

When we pay Self-Employed tax 15.3. Do we also pay the federal income tax together with self employment

[@HopeSpringsEternal24]

This really helped clear up somethings.

[@LYFEAccounting]

Awesome! Avoid unnecessary penalties

[@Troncoteca]

Thank you for the video. Can I use my standard deduction to file 1040 ES and then use my actual deductions on my 1040?

[@lynej2011]

Thank you for giving clear instructions. My frustration is that no one can provide an answer regarding those who do not know how much they will make that year. I heard that there was a worksheet on the IRS website to calculate the income that you made thusfar, but I cannot find it. Thanks!

[@LYFEAccounting]

Do you operate a business or self employed? In either case, you should be trying to do monthly bookkeeping so you know your income.. And this is besides just paying estimated tax.

[@nicholasfry7492]

what if I missed 3 of the 4 payments? Is it worth submitting the 4th or will I get penalized now regardless?

[@WootNyllon]

I am also confused about you subtracting his standard deduction AND his itemized deductions. I thought you had to pick one or the other but never both?

[@Kdiamondgoddess]

So what if you didn't make above 400 this tax year, do you still have to pay taxes, I'm a new business owner, my LLC company told me about the quarterly tax payment?

[@ssnydess6787]

How about a side hustle LLC? I am retired, receiving a military and SSC payments. I have a small LLC doing odd jobs with a small income, last year $0 income from it as I was just starting it.

[@pops1pops178]

Yeah I just got letter mailed I owe $150.00

[@nicholasfry7492]

sneaky indeed. Thanks for helping us save

[@anchiledi9722]

Hey sir I did Jan to April Uber and instacart I was going to pay but my husband said you didn’t make enough many to pay tax so I didn’t pay quarterly what is gona happen to me I made around $ 3000 but I didn’t pay tax quarterly

[@JugglingFinance]

If you have a W2 job and taxes are being taken out, can you just use your estimated self-employment tax alone to calculate your quarterly tax payments?

[@southernboymoneyshipmusicgroup]

Awesome info! Thank you Sir'

[@LYFEAccounting]

Glad you enjoyed it

[@MasterYourBooks]

Such awesome information from a fellow accounting pro! I love your videos. 2 things: #1 maybe add in the title something around calculating estimated taxes since thats what i was looking for and i just clicked thru a bunch of your videos and found the topic in this video. #2 do you have any more videos on calculating estimated taxes specifically?

[@LYFEAccounting]

Thanks! Are you asking about how to calculate federal taxes on a 1040? Or could you be a little more specific?

[@MasterYourBooks]

@@LYFEAccounting specifically calculating Self-Employment taxes and estimated taxes AND paying those taxes. so basically what you taught at the end of this video but more detailed. and maybe even examples for Schedule C, partnerships and Scorps. You asked for it 😲💪😁

[@rockfish6766]

Great job!

[@LYFEAccounting]

Thanks!

[@benjaminzamora8997]

What about if your fisrt quarter has more expenses than income

[@Cpre1111]

I'm confused. My primary income isn't from self employment; that income is already taxed. I thought you only have to pay estimated quarterly taxes on the untaxed income, like from Doordash (DD). Are you saying, in order to get my total income for Step 2 at 6:19, that I have to include the income from my job that isn't self employed and combine that with the income I've earned so far from DD (which I literally started 5 days ago) to figure out how much to pay for my estimated quarterly taxes? I only intended to pay quarterly taxes on the DD (untaxed) income, that's why I ask.

[@quintonhoskie5449]

Good information

[@lizschexnayder1976]

Where online do you pay self employment tax?

[@ProAmFightTalk]

What form do I need to file my 2021 Maryland state taxes because I paid quarterly online?

[@yokanshree4621]

3:32 what do you mean that my taxes has to be 12 months long

[@JugglingFinance]

This video is only a year old, but if you are now filing for 2021, there is one thing different from the video. At 3:12, he says there are three requirements you must meet to be exempt from penalty. But there are only two according to the IRS 2021 instructions for 1040 form page 62-63: www.freefilefillableforms.com/2021/instr/f1040.pdf?v=1642491843 Exception. You won't owe the penalty if your 2020 tax return was for a tax year of 12 full months and either of the following applies. 1. You had no tax shown on your 2020 return and you were a U.S. citizen or resident for all of 2020. 2. The total of lines 25d, 26, and Schedule 3, line 11, on your 2021 return is at least 100% of the tax shown on your 2020 return (110% of that amount if you aren't a farmer or fisherman, and your adjusted gross income (AGI) shown on your 2020 return was more than $150,000 (more than $75,000 if married filing separately for 2021)). Your estimated tax payments for 2021 must have been made on time and for the required amount.

[@taylorjordan2489]

After paying SE and Federal Taxes at estimate, could you expect to pay state taxes come tax day or is this already included somehow? Awesome Video! Feeling much more confident on handling business, Thanks!

[@LYFEAccounting]

Hey Taylor, thanks for watching! So State taxes aren’t included when you make estimated tax payments but they are usually much lower than federal taxes so most can avoid penalties

[@taylorjordan2489]

@@LYFEAccounting Thank you for your response! Could one safely set aside 30% of income to pay ALL fees due come tax season or more?

[@CoachJenAnytime90]

I'm married but first year made 17,000 had 5000k in expenses. Do I do 10% since it's my business for filing because it's under 19k? Help!! I got $900 estimated tax

[@benschmidt7165]

Wouldn’t the $30k in expenses lower the amount subject to the self employment tax?

[@carebear4554]

Yeah I thought that too. Why would expenses be taxed?

[@relicresells4884]

Do you have an accountant that that’s what you do in Nevada?

[@justg07]

Hello Shawn. I have a question I am self employed then turbo tax send me estimated tax 4 vouchers do I need to pay it even I am working till April 25th ? Thank you

[@LYFEAccounting]

Are you saying that you won’t be self employed after April 25th?

[@justg07]

@@LYFEAccounting Yes Sir . Do I still need to pay the 2nd 3rd and 4th voucher?

[@DiamondDave1]

Hire a cpa and have them work through your specific situation. This is great info however your situation is your situation, and it can't be templated from a YT video.

[@LYFEAccounting]

THANK YOU 💯

[@xxwoman]

Besides the quarterly taxes, what other taxes to we need to pay for if we're self employed? Federal and state (once a year)?

[@LYFEAccounting]

You may also have self employment taxes, but that is also paid at the end of the year. You may also need to pay sales taxes if you are in retail. What kind of business do you have?

[@waltercastro2015]

Being self employed for 6 years I've never paid quarterly taxes as LLC. Until this year 2023 doing on 2022. A message saying quarterly taxes. I was doing great for annually. Now quarterly??? I feel is more headache than just paying annually lump sum. Will i get penalties?

[@Dvegastyle]

You were supposed to get penalized and interest every tax year you didn’t pay etp. Very weird you didn’t

[@Dvegastyle]

Lyfe Accounting, correct me if I’m wrong..

[@Dvegastyle]

And what could be the reasons, that he wasn’t

[@Dean-rv1mz]

I have both a w-2 and a small business. My employer already takes out a certain amount for taxes. Do I have to pay estimated quarterly taxes on my job as well?

[@LYFEAccounting]

Hey! Take a look at our recent video called "Self-Employment Taxes for Small Business Explained"

[@believerscorner]

Hey men i forgot to pay the first quarter and im already late for the second one, can i pay them both in one voucher?

[@LYFEAccounting]

You can pay but can’t avoid the penalty

[@MauriceM_R]

I don’t identify as a taxpayer anymore. Does that exempt me from paying quarterly taxes?

[@LYFEAccounting]

What do you do?

[@Chandler890]

Estimated revenue for the year, so do you stop paying quarterly once you are at a loss or reduce the amount you pay

[@LYFEAccounting]

Exactly! If you are at a loss then no need to pay or if you reduce income by 25% then you should pay 25% less in taxe

[@rovicris8901]

Hi Sean , this is informative !But I want to know how much will be my estimated tax if given this facts. I plan to convert $82,000( $83,550 at 12% bracket) this year to Roth IRA, no earned income for current year ( sold my house ,use it for living expenses )married filing jointly, will pay conversion taxes from savings, 2022 standard deduction is 25,900, age 58. How will I do the math? I plan to pay the total conversion tax one time . Your feedback is highly appreciated. Thank you .

[@imthecreatorofmyrealitymyf700]

You wil pay between 20 to 30 thousand. The rest depends on your states and right off.

[@rovicris8901]

@@imthecreatorofmyrealitymyf700 hi how did you come up with 20-30 Thousand taxes when my income only is $82,000 , keeping it at 12% bracket , no other incomes ? I don’t think I paid this much with my first 2 conversions but I withheld taxes . This year I’ll pay the taxes from savings. Thank you for your time for this . Appreciated it . Be safe

[@GregMuniz7]

What if I made about 60 k from my normal job that takes out taxes and 6 k so far this year from doordash? I haven’t paid any estimated taxes yet and started in may this year doing doordash

[@LYFEAccounting]

Are you asking if you would have an estimated tax penalty? You likely won't

[@lw3371]

This is a 2 year old video and you just put 2023on the title smh click bait

[@wildbill7267]

Spoiler alert: pay enough tax ahead of time

[@thestandberrys2519]

😍😍😍

[@LYFEAccounting]

💯

[@cleancutslawncare]

Enjoy this”free country” what a joke