Under Wisconsin law, you must pay income tax on the income available to you. Generally, your employer will withhold income tax from your wages.
When you do not have a fixed salary, taxable income, or income that is not subject to withholding, you must pay an estimated quarterly tax. You must do this if you want your income tax return to have a balance due of $500 or more.
Wisconsin estimated Tax Payments!
It’s an estimated rate that applies to citizens who receive interest, pension income, capital gains, self-employment income, or any other means that earn them money outside of a monthly salary.
You must pay them quarterly because if you have not paid sufficient withholding taxes and estimated costs at the end of the year, you will be liable for tax penalties and the income tax ultimately due.
The stipulation is to pay annually 90% of the tax found on the current year’s return or 100% of the tax from the previous year’s return. In Wisconsin, you must make estimated tax payments if you expect to have a balance due of $500 or more on the income tax return declared on Form 1.
When are there exceptions, and you don’t have to pay estimated tax?
You are usually penalized if you have not made the required quarterly payments. However, fines are waived when:
- You show that the total tax on your return is less than $1,000 after subtracting the withholding tax paid
- If during the previous year you had no tax obligations
- For the farmer or fisherman who makes the estimated tax payment on January 15 and pays the full amount or makes the full payment, the tax return is filed before March 1
Another reason you will be exempt from the penalty is if a fortuitous event, unusual circumstances or disaster occurrs that makes the tax inequitable. Retirees and disabled will also avoid penalties during the first two years they obtain their benefits.
What happens if I make the estimated tax payment?
If you are not part of the above options and you must pay the estimated tax. One of the situations you can face is the obligation to pay interest if you did not make the payments each month.
On the other hand, you may be penalized with a fine that will depend on your debt and the time you took to comply with the obligation.
Methods to pay estimated taxes
You have different options to catch up with your estimated taxes; the first one is through Quick Pay or My Tax Account. Both are online platforms where you can register for a username and password, which allows you to monitor your account and make payments on the due date.
The other option is to complete and print Form 1 – ES, and the last option is through a phone call to 608 – 266 – 2486. Either will offer you good advantages and prevent you from being penalized for not making payments on time.
Suppose you have no idea how much the estimated amount is. In that case, you can go to the IRS or the Wisconsin Department of Revenue to get a worksheet and calculate the estimated tax amount according to the current rules.
If you experience difficulties, call the contact numbers and ask for guidance from a specialized agent to efficiently complete the estimated tax payment.