Think about Paying a Tax Estimate on Jan. 17
Dec 15, 2011
With most farmers net income for 2o11 being most likely higher than 2010, you may want to consider paying a tax estimate payment on January 17, 2012 to give you until April 15, 2012 to file your return.
Most farmers try to get their tax return filed by March 1 of each year. If a farmer files and pays their income tax on or before March 1, there is no requirement to make any estimated tax payments for the year. However, many farmers have invested in other operations such as an ethanol plant and many times they have to wait until after March 1 for the k-1 or the farmer has investments and the form 1099 does not even show up until after this date.
This causes the farmer and tax preparer to get in a huge hurry and many mistakes can happen.
If a farmer knows that his tax liability for 2011 will be higher than 2010, they can simply pay last year's tax amount on or before January 17, 2012. The required amount to be paid in is last year's tax amount or 66.67% of this year's tax (net of any federal income tax withholding including any overpayment applied from 2010), whichever amount is less.
With today's low interest rates, paying in some tax on January 17th, with the remainder on April 15 will most likely have about the same interest cost of paying all of it on March 1 and save the farmer and their income tax preparer a lot of headache.
If you think this might apply to you, make sure to review your situation with your income tax advisor to determine what amount of tax to pay on January 17, 2012.