It is important to be aware that some of you may are required to filing quarterly estimated taxes by virtue of the nature of your income and/or the relationship of your ultimate tax liability to your withholding. In those instances it is important to remember to pay your estimated tax payments timely and in an amount sufficient to avoid an unnecessary penalty known as the underpayment of estimated tax penalty.
This topic applies both to Federal and State income tax returns. In fact, those of you who do not face the Alternative Minimum Tax (AMT) should contemplate paying your 4th Quarter Massachusetts estimated tax, otherwise due on January 15th of the year after the tax year you are in, by December 31st of the current tax year, so as to be eligible to claim that payment on your current year’s tax return.
It is often strategic in calculating the amount applicable to your complying with your estimated tax obligations to only pay the minimum amount necessary to make sure that you avoid any penalties, while being able to retain the extra monies for your investment and/or current consumption.
By: Bruce M. Fogel, Esquire
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