Video Tips: June 15 Estimated Tax Payment
The U.S. tax system requires that income taxes be paid as income is earned or received during the year. For wages, this is accomplished by the employer withholding tax from the employee’s earnings and transferring the withheld tax to the IRS, which the employee then claims as a payment credit on their individual income tax return. When the amount of income tax withheld isn’t enough, or if the individual receives income on which tax isn’t withheld (such as interest, dividends, capital gains, rental profits, self-employment income, etc.), the individual may have to make estimated tax payments.
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