During Thursday night’s debate, president Donald Trump stated he prepaid millions of dollars in taxesThough it’s unsure what exactly he’s referring to, tax professionals suspect Trump might mean quarterly estimated taxes.Trump additionally brought up a “$750 submit fee” because that his tax returns. The IRS doesn’t charge a filing fee.
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President Donald Trump and also Democratic presidential candidate Joe Biden throughout the final presidential conflict at Belmont college in Nashville, Tennessee, top top Oct. 22.
President Donald trump card isn't the just one who's "prepaid" his taxes. Millions of other american have, together well.
At the very least that's the case if he supposed paying quarterly estimated taxes, according tax experts.
Talk of the president's earnings tax return — and the $750 he supposedly paid in 2016 and also 2017, every The new York times — made its method onto the stage Thursday night during his final debate versus Democratic candidate Joe Biden.
"I asked lock a mainly ago," trumped said, introduce to his accountants. "I said, 'What did ns pay?' they said, 'Sir, friend prepaid tens of countless dollars.' i prepaid my tax."
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"Tens of millions of dollars i prepaid since at some point they think it's an estimate," that said. "They think ns may have to pay tax."
Without a copy that Trump's taxation returns, it's tough to speak definitively what he's introduce to, tax professionals said.
However, tax experts say the president may mean making quarterly approximated tax payment — i m sorry would placed him among millions of other taxpayers, consisting of independent contractors, tiny businesses and also gig workers earning side income.
Over 9.6 million separation, personal, instance taxpayers made approximated tax payment totaling almost $404 billion throughout tax year 2018, according to the IRS.
President Trump states he prepaid his taxes by tens of numerous dollars
"To make this more about us as humans who make reasonable amounts of money without being too extravagant, it's the identical of making estimated tax payments," claimed Adam Markowitz, enrolled agent and vice chairman at Howard together Markowitz PA CPA in Leesburg, Florida.
During the debate, the president likewise characterized the infamous $750 payment that made come the IRS together a "filing fee."
The IRS doesn't evaluate a fees for merely filing your taxes top top time. "There is no such thing as a filing fee," claimed Markowitz.
Quarterly estimated taxes
The inner Revenue Services workplaces in Washington, D.C.
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Employees pay income and also payroll counting on a rolling basis by withholding those quantities from your paycheck. They receive a kind W-2 every January showing their wages and taxes withheld.
It's different for independent home builders and little businesses. These taxpayers salary an estimated tax every quarter, on Jan. 15, April 15, June 15 and Sept. 15.
Those payment cover revenue taxes, and also the 15.3% self-employment taxes that accumulation Social Security and Medicare.
Failure come cover the count in a stylish fashion results in penalties.
Trump tax returns show huge income counter by big losses
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Generally, you need to pay at least 90% of the taxation for the current year or 100% that the taxation owed from the prior year (110% of last year's taxation if your changed gross earnings exceeds $150,000).
It's additionally easy because that quarterly taxpayers come overpay your estimates, perhaps also by countless dollars.
"If you to be trying to have actually a plausible way to to speak you payment a the majority of money in taxation payments, you could write approximated tax payments because that the services of it and then insurance claim a refund as soon as you file," claimed certified financial planner Jeffrey Levine, CPA and director of advanced planning in ~ Buckingham riches Partners in lengthy Island, brand-new York.
Focusing top top the numbers
There's more to a taxpayer's story than simply the amount that winds up fan the IRS when filing a taxes return.
"At the end of the day, a tax return is a truing increase of what girlfriend paid during the year and what you were supposed to pay," stated Levine.
To acquire a feeling of someone's taxes liability because that the totality year, don't look in ~ the amount they payment the IRS on tax Day. That just shows the quantity they payment to "true up" their total payments.
Similarly, a refund is just reflective the the amount you overpaid. Uncle Sam is offering you earlier the difference between your payments and also your actual liability.
Instead, look in ~ the "total tax" for that year – or heat 16 ~ above the kind 1040 because that 2019 – said Levine.
"Some people pay too tiny during the year and also many overpay throughout the year," the said.
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