1. Payments
Spring 2018, lamc

2. Introduction
Federal income tax system is a “pay as you go” system. This means that tax is paid as income is earned or received during the year.
Income tax is withheld from following types of income:
Salaries and wages
Tips
Taxable fringe benefits
Sick pay
Pension and annuities
401(k) or IRA distributions
Unemployment compensation
Gambling winnings

3. Payments
Tax software will calculate payments portion if you have entered all the information from the forms provided by the taxpayer.
Estimated tax payments:
Self-employment income, dividends, interest, capital gains, rent and royalties are also subject to income tax.
Estimated tax payments must be paid quarterly for this type of income.
If estimated tax payments are not made, a penalty can be imposed.
Taxpayers who overpay their income taxes in one year can apply all or part of their overpayment to the next year’s estimated tax payments.

4. Extension to File Return
payments
Extension to File Return
Taxpayers can get automatic 6-month extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
Extension is until October 15.
This is only an extension to file, NOT pay.
If taxpayers do not pay by April 15, then they will owe interest and may be charged a penalty.