Even if your income grew this year, you will avoid penalties if you match the payments that you owed in the previous year (but you will still have to make up the additional tax payments). Estimated tax is the amount of tax an estate or trust expects to owe for the year after subtracting: Information about Form 1041-ES, Estimated Income Tax for Estates and Trusts, including recent updates, related forms and instructions on how to file. Many physicians either coming out of residency or moving from an employed position to one as an independent contractor or partner aren't aware of the need to pay quarterly estimated taxes. You may owe a penalty if: You didn't pay any estimated tax, You didn't pay enough estimated tax, or; You didn't make your payments on time. RALEIGH — The final batch of solar and other renewable energy projects requested under the “safe harbor” law enacted in April by the General Assembly could cost North Carolina taxpayers as much as $937,804,785 in credits, according to aggregated figures released Wednesday by the North Carolina Department of Revenue. Underpayment of Estimated Tax by Individuals. Paying 100% of the taxes you owed in the previous year is sometimes referred to as the safe harbor rule. Estimated payments are made quarterly according to the following schedule: 2021 Payment Due Dates: 1st Quarter - April 15, 2021 2nd Quarter - June 15, 2021 3rd Quarter - Sept. 15, 2021 Completing the Estimated Income Tax Form (NC-40) You should make estimated payments if your estimated Ohio tax liability (total tax minus total credits) less Ohio withholding is more than $500. TOTAL TRANSACTION TAX: 18.75% : North Carolina ... 1.1% times FCC safe harbor 911 tax: ... by applying the rates of percentage-based taxes in each state by the average monthly bill after excluding the estimated 49.4 percent of the average monthly bill representing internet access. Minimizing your income tax bill is an important part of your financial plan. Figure the penalty you owe or show you're exempt from a penalty using form IT-2210. If your previous year's adjusted gross income was more than $150,000 (or $75,000 for those who are married and filing separate returns last year), you will have to pay in 110 percent of your previous year's taxes to satisfy the "safe-harbor" requirement. The safest option to avoid an underpayment penalty is to aim for "100 percent of your previous year's taxes." Penalties for underpayment of estimated taxes. To avoid a penalty, your estimated tax payments plus your withholding and refundable credits must equal either of the following: 90% of your current year’s original tax liability (66.7% if you are a farmer or commercial fisherman) 100% of your prior year’s total tax liability (110% if your federal adjusted gross income is more than $150,000) Even worse, many doctors don't realize the difference between the amount of taxes that are withheld and the amount owed. If the due date falls on a Saturday, Sunday, or legal holiday, the next business day is the due date. Use Form 1041-ES to figure and pay estimated tax for an estate or trust. Corporations, tax-exempt organizations subject to the unrelated business income tax, and private foundations use Form 2220 to determine: Whether they are subject to the penalty for underpayment of estimated tax and, if so, The amount of the underpayment penalty for the period that applies. You may obtain the form by writing the N.C. Department of Revenue, Post Office Box 25000, Raleigh, North Carolina 27640-0001, by calling the Department at 1-877-252-3052 (toll-free), or from the Department’s website at www.dornc.com. That depends on your situation. You may not owe a penalty if you meet an exception to the penalty. Taxpayers who report on other than a calendar year basis should use their federal estimated tax installment due dates. The “safe harbor” rule of estimated tax payments.