Next week there are two important tax deadlines: April 15th is the deadline for filing your annual Federal income tax return. And, if you pay quarterly estimated income taxes, remember that your first-quarter estimated tax payment (using form 1040-ES) for 2008 is also due on April 15, 2008.
If you can not file your annual return by April 15th, you may file for an extension, but there is a good reason not to do that this year.
The stimulus payments will be mailed starting in May, 2008, to those who qualify. But you will not receive a check until you have filed your 2007 return and the IRS can determine if you qualify and the amount for which you qualify. Filing an extension will delay your receipt of the economic stimulus payment.
Even if you are not usually required to file a tax return, you will need to file if you quality for a stimulus payment. You can find out if you qualify and for how much at http://www.irs.gov/app/espc/. In general, payments range from $300 – $600 per person, but there are other qualifiers that may affect your payment.
And what about quarterly estimated taxes? You can figure out if you are required to file quarterly by consulting the IRS web site at http://www.irs.gov/publications/p505/ch02.html
Here are some general rules about who has to pay estimated taxes:
If most of your income is from being an employee, and you have tax withheld from your paychecks at your primary job, you may not need to pay estimated taxes. (This could also apply if your spouse is the primary wage earner and s/he has taxes withheld from his or her check.)
You must pay estimated tax for 2008 if both of the following apply.
1. You expect to owe at least $1,000 in tax for 2008, after subtracting your withholding and credits.
2. You expect your withholding and credits to be less than the smaller of:
1. 90% of the tax to be shown on your 2008 tax return, or
2. 100% of the tax shown on your 2007 tax return. Your 2007 tax return must cover all 12 months.