I've never filed any tax return in U.S.A.
Last year I began to sell on eBay from Jan. 2017 which is my only income. In Feb 2018 I received 1099-k from PayPal: number of payment transactions: 1500, gross amount of payments $250,000. Let's say I have 20% profit rate. The net income of 2017 would be around $50,000.
Before today April 9, I did not even know a self-employment seller should file quarterly in previous year 2017 rather than wait until April 17, 2018 to file tax for entire year of 2017. There is a Form 1040-ES Estimated Tax which is supposed to be filed quarterly in 2017. Obviously I owe far more than $1000 tax so I am not eligible for exception. I missed all four due dates in 2017!
I have been preparing for filing tax for the entire year 2017 and find almost impossible to get the documents ready before April 17 so plan to file application for automatic 6 month extension.
1040-ES is just for "estimated" tax, now I will have the "accurate" income for the entire year of 2017. I will be filing a regular tax for entire year of 2017, although I will postpone filing.
So are the total four "Form 1040-ES forms" for 2017 four quarters no longer necessary to be filed anymore? Do I still have to file them to avoid any potential further penalty? What is the penalty I already received? How much would be the penalty fine?
April 17 is also a filing due day for 2018’s first quarter. Does IRS have any extension that I can apply for quarterly filling due day?
Quarterly taxes for 2018 begin with the first payment on 4/17/18. If you are required to file them, an extension to file your 2017 return does not extend the time to pay the taxes due on your return, nor the estimated tax payment. There is no extension for the quarterly taxes.
You can compute the amount using the IRS vouchers in this link 2018 1040-ES
The penalty for underpaying 2017 taxes will be computed when you file your return. You can see how the penalty is calculated here Underpayment penalty
Seems there is no penalty for unpaid estimated tax in 2017, because I have no tax liability for 2016? (I have never filed tax return in the past)?
So I don't have to do anything for missed 2017 estimated tax now? Just file the 2018 1st quarter's tax and 2017 entire year's tax return before April 17?
Below is from p505 pdf file from IRS:
No penalty. Generally, you won’t have to pay a penalty for 2017 if any of the following apply.
* The total of your withholding and timely es-timated tax payments was at least as much as your 2016 tax. (See Special rules for certain individuals, later, for higher income taxpayers and farmers and fishermen.)
* The tax balance due on your 2017 return is no more than 10% of your total 2017 tax, and you paid all required estimated tax payments on time.
* Your total tax for 2017minus your with-holding is less than $1,000.
* You didn’t have a tax liability for 2016.
* You didn’t have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000
Seems other than the quarterly tax payment itself, NO filled form is required to be submitted quarterly along with the payment? The form 1040-ES is only for information, instructions and tax worksheet to compute how much tax one should pay. The worksheet is for one's own records only, not required to be submitted at all? The only one that might be submitted is the Payment Vouchers (on the last several pages of the 1040-ES, that is used to accurately identify and record payment by IRS), if one is making a payment of estimated tax by check or money order?
I was ever confused about this because when one is supposed to file a tax return for the entire year, there is Penalty for late filing (mid-April) and late payment respectively. However, as for the quarterly estimated tax, since no form is required to be submitted, it's meaningless to distinguish such two penalties？
So if someone missed due dates to pay quarterly tax last year, the only thing he can make up for this is to just make payment ASAP, no specific forms are required to be submitted to reduce penalty？
Any tax expert here can confirm my understanding above is correct?? I appreciate!
2018 1st quarter estimated taxes are due 4/17/18. 2017 tax return is also due 4/17/18, although you may file for an extension to file. The extension allows you 6 more months to file your 2017 return.
However, it does not extend the time to pay any taxes due (including an underpayment penalty if applicable). If you have a 2017 tax liability, it is due 4/17/2018. You can pay the 2017 tax liability and the 2018 1st Quarter estimated taxes directly on the IRS website.
See the link below for the 2018 estimated tax vouchers.