Should you be making Estimated Tax Payments??

Should you be making Estimated Tax Payments??

Estimated tax is looking back at your earnings from a set prior period and paying tax on that income, which is generally not subject to withholding (think 1099 contractor/ self employed) or when it is subject to withholdings and too little taxes are withheld. 

Because taxes were not withheld you are responsible for submitting a tax payment for them during the year. Our tax system is a pay as you go system and therefore estimated taxes are divided into four payment periods with a due date for each period.

FBM aka Boomer Deduction

FBM aka Boomer Deduction

A few things to note when preparing your taxes and including the Boomer Deduction:

-This applies to enlisted and officers alike.

-Be sure to include "2 Crew FBM Submariner" as your occupation on the return and on IRS form 2106. 

-Your command should have a letter available detailing Off Crew periods for the tax year that you can use to calculate the deductions.

-Be sure to exclude any personal time taken off during the Off-Crew periods from your calculations. 

 

Its EITC Awareness Day!!!!

Its EITC Awareness Day!!!!

Millions of people miss out on this valuable credit each year because they aren't aware that they are eligible for it. The EITC is essentially a anti-proverty credit and it is aimed at people who earned $53,505 or less last year. Two groups of people who commonly overlook this credit are those who are self-employed and farmers. 

 

Estimated Tax Payments are Due January 17th: What does it mean to you?

Estimated Tax Payments are Due January 17th: What does it mean to you?

Who must pay estimated taxes?

What a lot of people don’t understand is you could have taxes withheld from the income you receive from your “day job” and still be on the hook for estimated taxes. If your withholdings don’t cover your tax liability for the year you might need to make estimated tax payments. 

For example, if you owed more than $1,000 in taxes last year, you probably didn’t have enough taxes withheld from your paychecks or you didn’t pay tax on the items mentioned above and this could be an indicator that you need to pay estimated taxes this year. This is especially true if you haven’t changed your withholding rate.