Estimated Taxes 2021

Finn Kevin20 May, 2022Finance

The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay as you go, either by employer withholding or estimated tax payments. Employer withholding. If you are an employee, your employer generally withholds income tax from your pay. In addition, tax may be withheld from certain other income such as IRAs, pensions, bonuses, commissions, and gambling winnings.If all of your income will be subject to income tax withholding, you probably do not need to pay estimated tax. Events during the year may change your marital status or exemptions, adjustments, deductions, or credits you expect to claim on your tax return. When this happens, you should complete a new Form W-4, Employee?s Withholding Allowance Certificate, so that the appropriate amount of tax is withheld.