The End of Tax Season, Estimated Taxes, And Unemployment Compensation by Sheri L. Hoble

I’m still adjusting to the fact that we just went through 4th of July weekend… and “tax season” is STILL GOING.

I’m thankful for it, because I also know that extending the deadline during this wild, intensely difficult year (for so many) was a rare offering of grace from the IRS for Broward and Palm Beach County taxpayers.

Even if it has disrupted MY yearly rhythm, everyone here at Sheri L. Hoble CPA Inc. is animated by the fact that we get to be the people who come alongside Broward and Palm Beach County families during a season of great intensity and offer our skills to bring at least one small measure of relief.

We are in your corner.

So here’s my reminder: if you owe taxes, they are DUE on July 15th. As are the first two estimated tax payments.

A quick note on the payments: You must make separate payments for 2019 and 2020 (estimated) taxes. In other words, you shouldn’t just write one big check.

First take care of your 2019 obligations in one check, and then for your estimated payments be sure to fill out a Form 1040 ES payment voucher with a second check or money order for that. Indicate on your check memo line that this is a 2020 estimated tax payment. You do NOT need to make separate payments for both the first and second quarter.

If paying electronically through Direct Pay, make sure you indicate what the payment is for. But that process is usually smooth. 

“Am I subject to paying estimated taxes?”

Good question. Usually, you know if you are (and we’ve communicated this to you). If you’re confused, here’s the rule of thumb: you pay estimated tax for 2020 if you expect to owe at least $1,000 in tax for 2020 AND you expect your withholding and refundable credits to be less than the smaller of 90% of the tax to be shown on your 2020 tax return or 100% of the tax shown on your 2019 tax return.

We can help you determine what the amount should be, but a quick and dirty calculation would be one fourth of the estimate of what your taxes due at the end of the year would be.

(And this year, the first payment is double that amount, or one half, due on July 15th.)

Unemployment Compensation

Yes, the rumors are true: For federal income tax purposes, unemployment compensation is taxable. This includes your state benefits and the $600 payment from the feds, if you received that. To help manage the tax due, you can choose to have federal income tax withholding on your benefits or consider making estimated payments during the year.

If you need help, let us know: 954-752-4013

Lastly, would you do me a favor?

If you have already used us for your taxes, would you let us know what you thought? We really appreciate it. A review on Google would be very, very helpful.

That’s all I’m going to focus on today.

Warmly,

Sheri L. Hoble

(954) 752-4013

The End of Tax Season, Estimated Taxes, And Unemployment Compensation by Sheri L. Hoble