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Old 03-30-2014, 02:45 PM
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Join Date: Mar 2014
Posts: 2
Slight confusion over if what is my due date.

Hi, was wanting to clear something with dates. I just started a new job on March 17, as a 1099 contractor, after many years of being a w2 employee.

I totally understand the upcoming deadlines:
  • January 1 through March 31 - April 15
  • April 1 through May 31 - June 15

But I'm not sure what my deadline is, for my first estimated tax payment.
( I do know for sure that I'll need to make one, that's not the question. Aside from withholdings, the tax due will be well over 1000.)

My Confusion: I'm in a Pay Period that runs from Mar 17, to Mar 31. So you would think my deadline would be April 15.

However, I don't actually receive payment until April 11.. which would put me on the June 15 deadline, (and thus give me needed time to figure out how to do estimated taxes.)

All of the documentation I've read on the irs site, didn't distinguish between:
- the dates that you earn the pay through your work
- the date when are you actually physically paid with cash in your checking account/or receive check.

So was wondering, which dates actually matter, when you're considering what "slot" to put yourself into?

p.s. sorry for the long post on such a simple concept. When I tried to make it shorter on other sites, noone understood what I was talking about.



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Old 03-30-2014, 04:30 PM
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Join Date: Mar 2014
Location: Huntington Beach, CA
Posts: 8
Estimated Taxes Due Date

Hello Burbankdeveloper,

A couple of things; to begin with you are most likely what is referred to as a "Cash basis" taxpayer. This is important because the IRS will use a rule commonly referred to as "the mail box rule." Meaning, when did the check get processed, signature, and put into the US Postal Service, or some other "common carrier" delivery service, such as Fed-Ex, you constructively received payment for services.

If your check was processed on or after April 01, then your estimated payment will be due on June 15.

As an aside, to help you have clarity; the two most basic forms of how the IRS views when one constructively receives payment is by either accrual or cash basis. When one is on an accrual basis one is considered to have received payment at the moment the money is earned. You are not an accrual basis type of taxpayer, you are a cash basis type of taxpayer. Meaning you report it when it is constructively received.

My best advice to you is to seek a competent tax professional in your area. Because I do not know specifically which State you work in, or are domiciled, there may be other issues. A tax professional can provide you with a more complete answer, what type(s) of record(s) you should prepare and keep, and other important information to help you plan your taxes that will allow you to lawfully minimize your tax liability.

Thank you for coming to this website and posting your question. Please know that for brevity I intentionally omitted Internal Revenue Code(s) (IRC) and Treasury Regulations.

Good luck and best wishes.

Regards,

Ron Fenney
Tax Accountant
Huntington Beach, CA
@ronfenney



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Old 03-30-2014, 05:02 PM
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Join Date: Mar 2014
Posts: 2
Thanks Ron, I remember being asked previously if I was on accrual or cash basis, and I didn't know. It sounds like I probably am on cash basis.

I'm in CA by the way.

My current plan of action is to keep track of two things:
- the number of miles I drive to the work place
- the receipts of the books that I buy relating to my work

I think I'll forego my do it yourself attitude and just simply buy some time at an accountant for the first time.

I'm going to bring the above, plus my 2013 taxes that I already did - so the accountant can see my AGI for 2013. And of course obviously bring my pay stubs that I'm receiving now.
thanks again
Steve



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Old 03-30-2014, 07:01 PM
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Join Date: Oct 2010
Posts: 5,227
Quote:
Originally Posted by burbankdeveloper View Post
Thanks Ron, I remember being asked previously if I was on accrual or cash basis, and I didn't know. It sounds like I probably am on cash basis.

I'm in CA by the way.

My current plan of action is to keep track of two things:
- the number of miles I drive to the work place
- the receipts of the books that I buy relating to my work

I think I'll forego my do it yourself attitude and just simply buy some time at an accountant for the first time.

I'm going to bring the above, plus my 2013 taxes that I already did - so the accountant can see my AGI for 2013. And of course obviously bring my pay stubs that I'm receiving now.
thanks again
Steve
Hi, was wanting to clear something with dates. I just started a new job on March 17, as a 1099 contractor, after many years of being a w2 employee.

I totally understand the upcoming deadlines:

•January 1 through March 31 - April 15
•April 1 through May 31 - June 15=correct

But I'm not sure what my deadline is, for my first estimated tax payment.
( I do know for sure that I'll need to make one, that's not the question. Aside from withholdings, the tax due will be well over 1000.)=====correct;however, You do not have to pay estimated tax for the current year if you had no tax liability for the prior year;you were a U.S. citizen or resident for the whole year;your prior tax year covered a 12 month period.

My Confusion: I'm in a Pay Period that runs from Mar 17, to Mar 31. So you would think my deadline would be April 15.=====correct. Remember you have to pay both the IRS and your State unless you’re living in one of the states that does not collect income tax.


However, I don't actually receive payment until April 11.. which would put me on the Jut ne 15 deadline, (and thus give me needed time to figure out how to do estimated taxes.)===I guess but it depends; you are subject to tax in the current period/ year if you have unfettered control in determining when items of income will or should be paid. Unlike actual receipt, constructive receipt does not require physical possession of the item of income in question.



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Old 03-23-2015, 03:30 AM
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Join Date: Mar 2015
Posts: 6
Deadlines

Deadlines would mean in the indicated substitution to the account you are in. So you have to double check the account you are holding in.



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