Advanced English Dialogue for Business – Estimated tax

Listen to a Business English Dialogue About Estimated tax

Grace: Hi Louis, do you know what estimated tax is?

Louis: Yes, Grace. Estimated tax is a way for taxpayers to pay taxes on income that is not subject to withholding, such as self-employment income or investment income.

Grace: Right, Louis. It’s paid quarterly to cover income tax, self-employment tax, and any other taxes that may be owed to the government.

Louis: That’s correct, Grace. And if you don’t pay enough through withholding or estimated tax payments, you may be subject to penalties by the IRS.

Grace: Yes, Louis. It’s important to estimate your tax liability accurately to avoid penalties and interest charges.

Louis: Absolutely, Grace. Keeping track of your income and deductions throughout the year can help you make more accurate estimates and avoid surprises come tax time.

Grace: That’s true, Louis. And it’s a good idea to review your estimated tax payments periodically to make sure they align with your actual income and tax liability.

Louis: Definitely, Grace. Adjusting your estimated tax payments as needed can help you avoid underpayment penalties and ensure you’re meeting your tax obligations.

Grace: Right, Louis. And if your income or expenses change significantly during the year, it’s important to update your estimated tax payments accordingly.

Louis: Absolutely, Grace. Staying proactive and informed about your tax obligations can help you avoid any issues with the IRS and keep your finances on track.

Grace: That’s a good point, Louis. It’s always better to be proactive and avoid any potential tax problems down the line.

Louis: Absolutely, Grace. Planning ahead and staying on top of your estimated tax payments can help you stay in good standing with the IRS and avoid any unnecessary stress.