I’m still emotionally adjusting to the fact that we just went through 4th of July weekend … and “tax season” is STILL GOING.
I’m thankful for it, because I also know that extending the deadline during this wild, intensely difficult year (for so many) was a rare offering of grace from the IRS for New York/New Jersey Metro taxpayers.
Even if it has disrupted MY yearly rhythm, everyone here at Lillian’s Professional Services LLC is animated by the fact that we get to be the people who come alongside New York/New Jersey Metro families during a season of great intensity and offer our skills to bring at least one small measure of relief.
We are in your corner.
So here’s my reminder: if you owe taxes, they are DUE on July 15th. As are the first two estimated tax payments.
A quick note on the payments: You must make separate payments for 2019 and 2020 (estimated) taxes. In other words, you shouldn’t just write one big check.
First take care of your 2019 obligations in one check, and then for your estimated payments be sure to fill out a Form 1040 ES payment voucher with a second check or money order for that. Indicate on your check memo line that this is a 2020 estimated tax payment. You do NOT need to make separate payments for both the first and second quarter.
If paying electronically through Direct Pay, make sure you indicate what the payment is for. But that process is usually smooth. The only problem is that you can only pay up $9,999,999.99 — and since that applies to exactly zero of my New York/New Jersey Metro clients, it’s not really a problem.
If it does apply to you … you need better tax planning.
We can help with that. 😉
“Am I subject to paying estimated taxes?”
Good question. Usually, you know if you are (and we’ve communicated this to you). If you’re confused, here’s the rule of thumb: you pay estimated tax for 2020 if you expect to owe at least $1,000 in tax for 2020 AND you expect your withholding and refundable credits to be less than the smaller of 90% of the tax to be shown on your 2020 tax return or 100% of the tax shown on your 2019 tax return.
We can help you determine what the amount should be, but a quick and dirty calculation would be one fourth of the estimate of what your taxes due at the end of the year would be.
(And this year, the first payment is double that amount, or one half, due on July 15th.)
Yes, the rumors are true: For federal income tax purposes, unemployment compensation is taxable. This includes your state benefits and the $600 payment from the feds, if you received that. To help manage the tax due, you can choose to have federal income tax withholding on your benefits or consider making estimated payments during the year.
If you need help, let us know: https://calendly.com/lilprofsvc/30min
Lastly, would you do me a favor?
If you have already used us for your taxes, would you let us know what you thought? We really appreciate it. A great review on Google would be very, very helpful.
If for some reason you had problems, please shoot me an email so I can address it and make it right somehow.
That’s all I’m going to focus on today.
“CRISIS Action Plan” for my New York/New Jersey Metro tax clients and friends
1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.
2) Continue to stay financially and logistically prepared for worsening situations.
3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)
4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.