BWFA Rescues You from Dreaded Estimated Tax Payments

April 1st, 2008

We’ve written several articles on the subject of estimated taxes. These tax payments are required when you do not have enough taxes withheld from your salary, self-employed income, or retirement payments. By making these payments on time, you avoid the interest (they call them penalties) assessed by the IRS and states.

You probably hate making these payments. They are due at irregular times, can change depending on your income and deductions, and they represent eight more checks to write. Worse yet, if you miss a payment, you are charged at an annual interest rate that ranges from 9% to as much as 13%.

BWFA wants to make this process easier for our investment management and tax clients by making these payments for you. We are offering a quarterly estimated tax service that will:

• Collect updated pay statements and confirm deductions with you;
• Review your income and deductions, as well as your investment income and capital gains;
• Calculate your tax bill based on your investments and the other information you have provided;
• Notify you of our recommendation (by e-mail);
• Instruct TD Ameritrade to send estimated tax payments directly to the IRS and your home state; and
• Confirm with you that TD Ameritrade made the payments.

Who will benefit?
Certainly, our clients with larger investment accounts who incur capital gains on an irregular schedule will benefit. So will those who don’t want to be bothered with estimated payments or who have trouble remembering the quarterly due dates. And for those of you who travel, take extended vacations, or have health issues, you’ll have the peace of mind in knowing that BWFA will take care of these required payments for you.

What is the process?
We will need you to sign one form for TD Ameritrade that authorizes quarterly transfers from your account. That’s all there is to it.

What is the fee?
The service is intended for our clients who use both Investment Management Services and Tax Services. The annual fee will be $500.

Our goal at BWFA is to help you enjoy your life by reducing your stress over finances. For our clients who must make quarterly estimated tax payments, our new monitoring and payment service can eliminate a source of financial hassle and frustration. If you are interested in having BWFA perform this quarterly service, please contact us.