HOW DO I DETERMINE HOW MUCH “ESTIMATED TAX” I SHOULD PAY?
Since you won’t know for certain the exact amount of money you will earn in any year, you need to “estimate” that amount to help determine the amount of taxes you may owe. The method most people use to determine their estimated tax is to multiply the amount of taxable earnings reported on last year’s tax return by the tax rate. In the case of Aberdeen taxes, you would multiply the amount of taxable earnings by the tax rate of 1% (.01). For example, a person with an annual income last year of $16,000, would multiply that amount times 1% (.01) to determine that the amount of estimated taxes they would owe would be $160.00 for the year.
HOW OFTEN IS “ESTIMATED TAX” PAID?
After the amount of estimated tax is determined, you need to divide the amount by four (4) and pay that amount once every three months. The payments would be due on April 30, July 31, October 31, and January 31 of next year. Failure to make estimated tax payments by the appropriate due dates may result in penalty and interest charges for underpayment of estimated tax. (See question "What if I don't pay estimated tax").
IS ESTIMATED TAX ACTUALLY PREPAYMENT OF TAXES?
Estimated tax is not prepayment of taxes, in fact it is really paying taxes later than people who have their taxes withheld from each paycheck. People who pay estimated tax are not billed for the tax they owe until the end of each three month period. They are then required to pay the amount of taxes that should have been deducted from their paycheck for the previous three months. Employees who have their taxes withheld from each paycheck are paying their taxes during each pay period.
IS MY EMPLOYER REQUIRED TO WITHHOLD MY ABERDEEN TAXES?
Employers located inside Aberdeen are required to withhold Aberdeen taxes from their employee earnings. Employers outside Aberdeen are encouraged to withhold Aberdeen taxes but are not required. If your employer is willing to withhold and remit your Aberdeen taxes, they can contact the Income Tax Bureau for information on this procedure.
WHAT IF I DON’T PAY “ESTIMATED TAX”?
If your net tax liability is in excess of $100 annually and you don’t file and pay at least 70% of your tax liability to Aberdeen, you will be charged interest and penalty on the amount of taxes you should have paid during the year.
WHERE CAN I OBTAIN ADDITIONAL INFORMATION OR FORMS?
Contact the Income Tax Bureau. The regular office hours are from 8:00 to 5:00 weekdays.
Aberdeen Income Tax Bureau
Village of Aberdeen
P.O. Box 579
Mt. Orab, Ohio 45154
Phone: (800) 779-3165
Fax: (937) 444-9241
Email: aberdeentax@netscape.net
