I have always been under the impression that you had to file quarterly estimated taxes. I have been hearing several truckers at truck stops lately that say that they never file that way and have never been charged penalties, late fees etc. It sounds funny to me. Am I right? My C.P.A. says I have too. layoutshooter
hI Layoutshooter,
Truthfully, if you had to pay taxes in the prior year, Yes, you must file estimated taxes,
as a matter of fact you are suppose to pay 98% of the taxes owed as estimated taxes for the upcoming tax year, meaning 2007 if you did not file, If you did not file any this year for next tax filing year 2008, you will have to pay a penalty,
Believe or not they might not realize that they really had to pay a penalty, on the 2007 tax return, and prior years, it has always been there, the penalty it not a lot, approx 1-5% of the tax owed.
You will find in on the 2006 tax return either on line 76, 0r 77,
It is on Line 77 on the 2007 tax return, ESTIMATED TAX PENALTY.
If the person who prepared these drivers taxes, What this means that they really did not check the tax return copies they were given for there records. and did not question why this entry was on this line. Now you know, and everyone knows. Make time to check your return before you leave the tax preparer office.
EVEN IF YOU DO NOT KNOW WHAT YOUR CPA, EA, OR TAX PREPARER PUTS ON YOUR RETURN, YOU ARE SUPPOSE TO ASK QUESTIONS OF WHERE IS WHAT?, AND WHAT IS THIS?. AND HE HAS TO TAKE THE TIME TO ANSWER YOUR QUESTIONS, THAT IS WHAT YOU ARE PAYING FOR!.
When I complete a tax return and it is ready for pick or if I have to mail it out of state, I try and send it to the truckstop where the driver will be the next day. I will fedex it to them so they have it, That way they can check out the return, and if they have questions, they can either e-mail me or call me to find out why this is where it is or why this or that. I explain exactly how I completed the return to them before it is filed.
You have to remember "ONCE YOU SIGN THE RETURN WEATHER IT BE BY ACTUAL SIGNATURE,OR ELECTRONICLY, YOU ARE RESPONSIBLE, NOT THE PERSON WHO PREPARES THE RETURN".
He can only go by what you give him and how you provide the information so he can correctly put the items in the correct lines.
The only problem with telling you what you have to pay is that they most of the time do not include some deductions for the estimated tax payment, LIKE THE PER DIEM ALLOWANCE, WHICH IS ONE OF THE LARGEST ONE. SO IT YOUR OUT 28 DAYS A MONTH
THATS $ 1,456 x 80%- $ 1165.00 PER MONTH LESS THAT WHAT YOU ARE TOLD TO PAY.
If you really do not have the estimated amount to pay, Don't pay it, you will just have to pay the whole thing at the end of the year come tax filing time. and then if you do not have the total amount , you go on the installment plan, but that is around 6% per quarter (24% per year(right now)) compounded daily on the unpaid balance, plus 1/2 of 1% compounded daily Also.you are charged penalties on top of penalties and interest on top of interest. it is very difficult to estimate what you will actually owe the IRS after 1 year of making Minimun Payments of $100.00 per month. on a $5000.00 tax bill. That $5000.00 could turn into $15,000 in 3-5 year if not paid at all.
So, If anyone else would like to ask me a question please do not hesitate to ask, that is what I am here for. I check all e-mails and post information weekly as I can as I recieve the updates in the tax laws.
I HAVE A NEW E-MAIL ADDRESS
[email protected]
Thank you
Franklin Katz, ATP, PA, PB
Franks Tax & Business Service
120 York Rd
Kings Mountain, NC 28086
(704) 739-4039
Fax: (704) 739-3934
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Circular 230 Disclaimer - Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.
