Video: Estimated Tax Payments

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of estimated tax payments, highlighting when and why they need to be made. Focusing on individuals who are self-employed or have significant income that isn't subject to withholding, Nick clarifies that these payments are a means to cover anticipated tax liability within the year. Using simple and relevant examples, he illustrates the thresholds and calculations necessary to avoid penalties, such as ensuring that payments are at least 90% of the current year's tax liability or 100% of the preceding year's. The lesson includes practical advice and personal anecdotes to emphasize the importance of accurate withholding and to demystify the quarterly estimated tax payment process. Nick also reinforces these concepts with concrete examples, ensuring that the essentials of estimated tax payments are clearly understood and remembered.