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Michigan 1040 Estimated Tax
2/22/2012 10:54:35 AM
Does anyone file the MI 1040 ES vouchers for their taxes? I just received a letter in the mail because I owed over $500 for last year, but only because of Use Tax for internet purchases that pushed me over $500.
I will owe over $500 this year as well due to Use Tax. I asked them about how Use Tax impacts this, and the MI Dept of Treasury gave me some vague info saying that if it changes for 2012, I won't need to pay the estimated taxes. The Use Tax division said that it does affect Estimated Taxes.
How do I know how much I will owe in Use Tax by 31 DEC, and be able to properly estimated the taxes for FY2012? It makes no sense, but the tax code doesn't make sense in general.
I thought about just cutting them a check to cover Estimated Taxes for the entire year, but they want them in quarterly payments with a voucher coupon.
I will owe over $500 this year as well due to Use Tax. I asked them about how Use Tax impacts this, and the MI Dept of Treasury gave me some vague info saying that if it changes for 2012, I won't need to pay the estimated taxes. The Use Tax division said that it does affect Estimated Taxes.
How do I know how much I will owe in Use Tax by 31 DEC, and be able to properly estimated the taxes for FY2012? It makes no sense, but the tax code doesn't make sense in general.
I thought about just cutting them a check to cover Estimated Taxes for the entire year, but they want them in quarterly payments with a voucher coupon.
2/22/2012 2:41:00 PM
What is the Use tax?
You buy stuff over the internet?
Thats risky, I wouldn't do that.
Everyone who buys on the internet gets there identy stolen.
You buy stuff over the internet?
Thats risky, I wouldn't do that.
Everyone who buys on the internet gets there identy stolen.
2/22/2012 8:50:10 PM
Estimated taxes are based on the prior year total. That is why they asked if there was any significant change. Since you paid $500 last year then it should be reasonably close to $500 this year. You will need to make quarterly estimated taxes of $125. There is a formula to figure it out.
2/23/2012 6:10:02 AM
Originally Posted By ShermiesRule:
Estimated taxes are based on the prior year total. That is why they asked if there was any significant change. Since you paid $500 last year then it should be reasonably close to $500 this year. You will need to make quarterly estimated taxes of $125. There is a formula to figure it out.
Estimated taxes are based on the prior year total. That is why they asked if there was any significant change. Since you paid $500 last year then it should be reasonably close to $500 this year. You will need to make quarterly estimated taxes of $125. There is a formula to figure it out.
Yes, the worksheet gives you instructions but does not factor in Use Tax to figure out next year's estimated taxes. Based on the worksheet, I will owe less than $500 next year and to divide that figure by 4. If my Use Tax by the end of this year brings me over $500 again, they could say I underpaid my estimated tax. It seems like an endless do loop?
I also don't understand why we have to mail in 4 equal payments instead of 1 lump sum. It would be less paperwork/postage/burden.
2/23/2012 6:24:42 AM
I ran into this a few years back while working as a contractor (Self Employed). The short o the matter has it was explained to me, by a tax preparer. You can make ESTIMATED payments throughout the year, and taxes are DUE April 15th. If you make estimated payments, even if your estimates are low, they are not going to come after you. What they are looking for is the self employeed who make no payments all year, then make one lump payment in April.
As for four payments vs one lump sum. well, the State does not like to wait to get THEIR money. Why should you hold THEIR money for months on end, gaining interest, when they have already earned it. And yes, they really go out of their way to EARN your Use tax.
As for four payments vs one lump sum. well, the State does not like to wait to get THEIR money. Why should you hold THEIR money for months on end, gaining interest, when they have already earned it. And yes, they really go out of their way to EARN your Use tax.
2/24/2012 5:32:46 PM
Originally Posted By metroplex:
I also don't understand why we have to mail in 4 equal payments instead of 1 lump sum. It would be less paperwork/postage/burden.
I also don't understand why we have to mail in 4 equal payments instead of 1 lump sum. It would be less paperwork/postage/burden.
You can. Just send it in with the 4 estimates forms. I've done it the last 3 or 4 years and not heard a peep out of the state.
I'd send them in quarterly but I'd forget sure as shit at one point and then owe interest and penalties. At the .015% or whatever the bank gives on savings accounts it's worth the peace of mind to me.
As stated, the state loves spending your money as fast as they can. Probably owe more next year with the newest tax on retiree's.
