As you are reading this, if you are in fact reading on the same day this was written, both the federal and New Jersey government are reaching deep into my bank accounts. At the end of the day, I will find myself worth several thousand dollars less than at the beginning of the day. Today is the day quarterly estimated taxes are due for those of us who live in the United States and for those who opt or are required to make these payments.
Last year, I didn’t pay enough through estimated tax payments and I was subject to a small penalty tax. I believe I’ve calculated the correct amounts this year to avoid paying extra. Like last year, I enrolled in automatic tax payments for both the federal and state income taxes. This saves the trouble of sending checks, but it necessitates having the right amount of money in my bank account at the right time.
To handle this requirement and to further automate my finances, the accounts are funded monthly to ensure I’m saving enough for both quarterly estimated payments and what will likely be another significant final tax bill next April.