Questions: How much can I gift to my children without paying taxes? Do I have to file a tax return? What if I cannot file by April 15th? My spouse and I are filing separate returns. How can we split our itemized deductions? How do I know if I have to file quarterly individual estimated tax payments? Do self-employment taxes need to be paid quarterly or yearly? When are the quarterly estimated tax returns due? How do I report the estimated payments I have made when I file my taxes at the end of the year? I recently formed a limited liability company (LLC). The LLC has no employees. Do I need a separate Federal Tax ID number for the LLC? What should I do if I made a mistake on my tax return? Answers: How much can I gift to my children without paying taxes? Each person can gift up to $12,000 per year per child. EX: A married couple can gift a total of $24,000 per child annually with no tax implication. Top Do I have to file a tax return? You must file a tax return if you are a citizen or resident of the United States, or a resident of Puerto Rico and you meet certain filing requirements. The filing requirements vary by filing status and age. Go to http://www.irs.gov and see publication 17 for details. Top What if I cannot file by April 15th? If you cannot file your income tax return by April 15th, you may request an automatic extension until October 15th by filing form 4868. The extension does not increase your time to pay any tax due. If you have tax due when you file your extended return, penalties and interest may apply. Top My spouse and I are filing separate returns. How can we split our itemized deductions? If you and your spouse file separate returns and one of you itemizes deductions, the other spouse will have a standard deduction of zero. Therefore, the other spouse should also itemize deductions. You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse. Deductible expenses that are paid out of separate funds, such as medical expenses, are deductible by the spouse who pays them. If these expenses are paid from community funds, the deduction may depend on whether or not you live in a community property state. In a community property state, the deduction is, generally, divided equally between you and your spouse. For more information refer to Publication 504, Divorced or Separated Individuals; and Publication 555, Community Property. Top How do I know if I have to file quarterly individual estimated tax payments? Estimated tax payments can be used to pay Federal income tax, self-employment tax, and household employment tax. To estimate if you need to pay tax on income not subject to withholding or on other income from which not enough tax is withheld, you need to calculate if the total tax you'll owe on your annual income tax return will be covered by the amount of tax you have already had either: withheld from wages and other payments, or paid in earlier estimated payments for the year, or credited to your account from adjustments or overpayments to previously filed returns. Generally, you should make estimated tax payments if you will owe tax more, than an amount specific by law, after withholding and credits, and the total amount of tax withheld and your credits will be less than the smaller of: 90% of the tax to be shown on your current tax return, or 100% of the tax shown on your prior year's tax return, if your prior year's tax return covered all 12 months of the year. However, if your prior year's adjusted gross income exceeded a certain amount based on your filing status, then you must pay 110% instead of 100% of last year's tax. (Note: the percentages change depending on the tax year. Refer to Chapter 2 of Publication 505, Tax Withholding and Estimated Tax.) Estimated tax requirements are different for farmers and fishermen. Publication 505, Chapter 2, 3, & 4, Tax Withholding and Estimated Tax, provides more information about these special estimated tax rules and about estimated tax in general. Get Form 1040-ES (PDF), Estimated Tax for Individuals, to help you figure your estimated tax liability. References: Publication 505, Tax Withholding and Estimated Tax Form 1040-ES (PDF), Estimated Tax for Individuals Top Do self-employment taxes need to be paid quarterly or yearly? Self-employment tax is paid by making quarterly estimated tax payments which include both income tax and social security tax. References: Publication 334, Tax Guide for Small Business Publication 505, Tax Withholding and Estimated Tax Top When are the quarterly estimated tax returns due? Your first estimated tax payment is usually due the 15th of April. You may pay the entire year's estimated tax at that time, or you may pay your estimated tax in four payments. The four payments are due April 15th, June 15th, September 15, and January 15th of the following year. If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. References: Publication 505, Tax Withholding and Estimated Tax, Chapter 2. Top How do I report the estimated payments I have made when I file my taxes at the end of the year? Take credit for all your estimated tax payments in the "Payments" section of Form 1040 (PDF), U.S. Individual Income Tax Return, or Form 1040A (PDF) , U.S. Individual Income Tax Return. References: Publication 505, Tax Withholding and Estimated Tax Top I recently formed a limited liability company (LLC). The LLC has no employees. Do I need a separate Federal Tax ID number for the LLC? No, you will not need a separate Federal Tax ID number for the LLC if you are the sole owner of the LLC and the LLC has no employees. If you are the sole owner of the LLC and the LLC has employees, you will need to get a separate Federal Tax ID number, if you choose to have the LLC report and pay employment taxes with respect to employees of the LLC. If you are not the sole owner of the LLC, you will need a separate Federal Tax ID number for the LLC. See Notice 99-6, 1999-1 CB 321. References: Publication 1635 (PDF), Understanding your EIN - Employer identification Number - IRS Form SS-4 (PDF), Application for Employer Identification Number Form 8832 (PDF), Entity Classification Election Top What should I do if I made a mistake on my tax return? If you discover an error, you may file an amended return by using the 1040X form. Top