Too Many Estimated Tax Vouchers?

Taxpayers without the ability to have taxes withheld or who simply wish to prepay some additional amount can do so by making payments with estimated tax vouchers.

When the potential need for vouchers is determined during a tax appointment, this office will discuss the issue with the client, and, if estimated vouchers are warranted, they will be prepared for the client.  By prepaying taxes, taxpayers can avoid some substantial underpayment penalties that otherwise might apply.  Typically, this occurs where a taxpayer has self-employment income, substantial investment income, wages are earned by both spouses, or there is simply underwithholding that will result in a large amount due when the return is filed.

The IRS is not privy to our advanced planning or can determine whether or not you were provided with vouchers.  They only see a large balance due or know that you made estimated tax payments for the prior year, and, therefore, may send you a second set of estimated vouchers.  So, if you have already or subsequently receive a set of estimated tax vouchers from the IRS, here is what you need to do:

• If, at your appointment, the need for vouchers was discussed and it was determined that they were not needed, you can probably discard the ones the IRS sent.

• If this office prepared and supplied you with a set of vouchers, continue to use the ones provided since they are already printed with the amount that should be paid.  If you decide to use the ones the IRS sent to you, be sure to fill in the payment amount on each voucher.

• If you normally receive a refund without making prepayments other than withholding, and 2010 is going to be a similar year tax-wise, then there is probably no need for the vouchers and you can discard them.

• If, for some reason, you believe that you will have an increase in taxes for 2010, you may wish to retain the vouchers and call this office for assistance.

Estimated tax vouchers include your name, address and SSN so be sure to discard them carefully.   

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