DeductionsAn expense subtracted from adjusted gross income when calculating taxable income, such as for state and local taxes paid, charitable gifts, and certain types of interest payments or business expenses.
Estimated Tax (ES) Payments
Tax payments made to IRS for the current tax year. Those taxpayers that do not have withholding taken out of their paycheck OR owed more than $1,000 on the previous year's tax return is required to pay estimated tax payments to the IRS for the current year. Taxpayers are supposed to estimate their income at the beginning of the year to determine their estimated tax liability. If they owe taxes when they file a return even though they have withholding, the IRS will penalize them if they do not pay estimates. Estimated payments allow taxpayers to remain in compliance with the payment demands of the IRS. ES payments are due the 15th day of April, June, and September of the current year and January of the following year.
If a taxpayer is required to make ES payments and they want an OIC, the taxpayer must be current with all tax payments including ES payments prior to submitting an OIC. If the OIC is submitted between January and March, the taxpayer is not delinquent until he does not pay his first ES payment due April 15th. If they are not current with last years ES payments, an OIC can be submitting including last years debt. If an OIC has already submitted, the taxpayer must continue to pay ES payments while the OIC is in review and until they have proper withholding and stop acquiring a debt. Since taxpayers are required to pay their taxes after the OIC is accepted, it is to the taxpayer's benefit to start off in compliance by paying all estimates while the OIC is in review and not by adding that year to the current OIC.
Federal Insurance Contributions Act (FICA)This is Social Security Tax. FICA consists of Social Security (supplemental retirement income) payroll tax and a Medicare (hospital insurance) tax. The tax is levied on employers, employees, and certain self-employed individuals. On some pay stubs it may be listed as some form of Old Age Survivors and Disability Insurance (OASDI)
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