Don't Mess With Taxes

Dang! Even with the tax calendar in the right column of the blog as a reminder, this sneaks up on me every time!

The fourth quarter payment of 2007's estimated taxes is due Tuesday, Jan. 15.

Like your regular 1040, if your filing is postmarked by that day, it's considered, in IRS speak, "timely filed." Just be sure you use the envelope that came with the IRS packet. These payments go to offices different from the processing centers that handle regular 1040s. So if you've lost the envelope, check page 6 of the 1040-ES instructions for the correct mailing address.

If you pay electronically via the IRS' Electronic Federal Tax Payment System, you need to take action ASAP to ensure that your bank pushes the button on Tuesday to move your last 1040-ES payment to the Treasury's account.

And again like your regular taxes, if you prefer you can pay your estimated amounts with a credit card. Uncle Sam has contracted with Link2Gov and Official Payments to handle the charges. Remember, you'll pay a fee of around 3 percent to pay this way.

Other estimated options: If you can't make the Jan. 15 deadline, all isn't lost. If you file your 2007 tax return and pay all tax due by Jan. 31, the IRS gives you a pass on the tax year's final estimated payment.

But whether you make the 15th or 31st due date, just make sure you get your money to the IRS. If you underpay your estimated taxes, you could be hit with interest and penalties.

This story has details on the 1040-ES process and some other ways to make sure you don't end up owing more than you should.

Planning for 2008: I know, I know. It's still early in the year and you're already sick of taxes. Sorry. But you do need to do some planning if you'll be making 2008 estimated tax payments.

Mark these dates on your calendar so you don't have to rely solely on my last-minute alerts:


You'll notice that 2008's second payment is June 16. That's because the 15th, the usual due date, is a Sunday this year. As with other tax filings, when a deadline falls on a weekend or federal holiday, it gets pushed to the next business day.

The calendar works in favor of 2008 estimated tax filers at the end of the cycle, too. Next January when 1040-ES voucher #4 is due, you can skip it and, since Jan. 31, 2009, is a Saturday, you'll have a couple more days, until Feb. 2, 2009, to file your return and pay your tax bill.