Estimated Tax Payments Due on Monday, June 16th

Estimated tax payments are due on Monday. And this quarter I decided to be real smart and actually figure out how much I needed to pay to avoid having a balance due at the end of the year. It turns out that figuring out how much estimated taxes to pay can be a great planning opportunity for consultants, investors, and small business owners. Now that the year is almost half over, it would be a good time to figure out how much income was earned, how many tax-deductible expenses were paid, and where we stand as far as taxes are concerned. If too much tax is owed, this may be a good time to think about business expenses, selling off stocks with losses, or even boosting retirement savings.

One reader even emailed to ask if she could increase her paycheck withholding instead of paying estimates. The answer is yes, but adjusting withholding involves crunching just as many numbers as figuring out estimates. Typically, I will ask clients to withholding an extra dollar amount per pay period to cover taxes relating to their investments or side jobs, and this avoids the hassle of mailing in extra payments throughout the year.

More information:

• 3 ways to send in estimated tax payments
• Sample estimated tax calculation
• More tax deadlines