Friday, December 3, 2010
And Why Would I Pay My Taxes Early?
We sometimes recommend that you pay the final Pennsylvania estimate in December rather than in January. The reason has to do with timing of the deduction from your federal tax return. If the payment is made in December 2010, the deduction is taken on your 2010 return and provides an almost immediate tax benefit. However, if payment is made in January 2011, the deduction is taken on your 2011 tax return. You still obtain a tax benefit, but not until a full 12 months later.
For taxpayers required to pay Alternative Minimum Tax, more in-depth planning is required. However, if you do not fall into that category, it will benefit you to pay the final PA estimate before 2010 comes to a close.