Law FAQ: What is an estimated tax payment, and who is required to make them?

Law FAQ: What is an estimated tax payment, and who is required to make them?

What is an estimated tax payment?

Estimated tax payment is the method used to pay tax on income that is not subject to withholding.  Functionally-speaking, you can view estimated tax payments as a substitute for employer withholding for any income you might receive for which there is no “employer” who is withholding taxes out of your paycheck.  For example, if you are self-employed, or if you earn meaningful income from side jobs for which there is no employer who is withholding taxes, then you would generally be required to make quarterly estimated tax payments as to that income.

Who is required to make an estimated tax payment?

From the IRS website: “If you [file your tax return] as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.”

If you are a salaried employee who has filled out your W-4 form correctly, and you are having the appropriate amount withheld from your check each pay period, then you are generally not required to make estimated tax payments.  However, if you have a side job where you are essentially self-employed (for example: doing odd jobs, cutting grass on weekends, etc.) and you receive a meaningful amount of income for which there is no employer withholding, then you may be required to make quarterly estimated payments, or to adjust your employer withholding to make up the extra difference.  You can use the worksheet on IRS Form 1040ES to determine whether you might owe estimated tax payments.

When are estimated tax payments due?

There are four payment periods, and each period has a different due date depending on the year.  The remaining due dates for 2011 taxes are Thursday, September 15, 2011, and Tuesday, January 17, 2012.  If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.  In other words, you can’t skip or underpay on one of the payment dates.

What happens if you are required to pay estimated taxes but fail to do so?

From the IRS website: “If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.”

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Advising Clients about Facebook and Twitter

The Tennessee Bar Journal has an insightful article this month about new challenges for lawyers arising out of technology, and the potential collateral damage to their clients’ cases as result of social media like Facebook and Twitter.  Indeed, litigation has always meant that your clients were going to be under scrutiny from their adversaries; however, the ease and widespread use of Facebook and Twitter has vastly changed the rules of the game.

These days, social media is a virtually free and easy database for investigators and adversaries seeking information about clients.  And the informality and ease with which people interact and share information on Facebook and Twitter can often provide fodder for someone looking for ammunition — possibly even to mislead/distort.

Technology is a challenge, and lawyers must be technically savvy enough to be familiar with how social media works so that they discuss these issue intelligently with their clients in order to provide sound advice.


News: Pharmacy Mistakenly Gives Abortion Drug to Pregnant Woman

News: Pharmacy Mistakenly Gives Abortion Drug to Pregnant Woman

News outlets are reporting today that a pharmacy in Denver mistakenly filled a pregnant woman’s prescription with methotrexate, which is a chemotherapy drug that is also used for early-stage pregnancy termination.  There is now a chance that she might lose her unborn child.

Unfortunately, as we’ve blogged about before, pharmacy mix-ups are much more common than you might realize.  In fact, our firm has represented multiple plaintiffs in cases involving serious medication errors by national pharmacy chains.

To be safe, you should always take steps to protect yourself.  Resolve to be a responsible partner in your own healthcare, and communicate with your pharmacist and other healthcare providers. Ask questions if necessary, and stay vigilant about your medications. Know what your pills are supposed to look like, and what your dosage is supposed to be.

For all new medications or medications you are not familiar with, be sure to utilize helpful online “pill identification” tools to confirm that you are taking the right pills.  You can find links on our Blog site by clicking here.

Patterson quoted in Memphis Commercial Appeal regarding Municipal School Districts

Memphis Commercial Appeal regarding Municipal School Districts

Chris Patterson was quoted today in the Memphis Commercial Appeal in connection with potential new educational options being considered by the state legislature in the wake of the debate on the Memphis City Schools charter surrender.

Several Shelby County municipalities are studying the possibility of establishing their own municipal districts, and Patterson was quoted in regard to the potential impact on Oakland, TN.  Patterson Bray serves as counsel to the Town of Oakland, and Patterson is monitoring the various options that may be “in play” for the Town as the debate in Shelby County moves forward.

The newspaper quoted Patterson as follows:

The monitoring of potential state legislation is not limited to Shelby County. Chris Patterson, attorney for Oakland in Fayette County, said the city doesn’t want to be left out of any discussion about new school districts. He said officials are preparing a 20-year growth plan, and the Memphis school situation could affect Oakland.

“There will be some level of exodus, no matter what the result,” Patterson said. “… Oakland wants to avail itself of some of that flight. We want to make Fayette an option rather than DeSoto County or Tipton.”

CNN Report: Study Shows Surgery Mix-ups More Common Than You Might Think

Study Shows Surgery Mix-ups More Common Than You Might Think

“Unthinkable errors by doctors and surgeons — such as amputating the wrong leg or removing organs from the wrong patient — occur more frequently than previously believed, a new study suggests.  …  Catastrophic surgical errors are ‘a lot more common than the public thinks,’ says Dr. Martin Makary, M.D., a professor of surgery and public health at Johns Hopkins University, in Baltimore.”

“One of the worst cases I saw in this study was two patients who had had prostate biopsies,” [lead researcher Dr. Philip] Stahel says. “One had cancer and one did not. Clinicians mixed up the samples and the patient without cancer had a radical prostatectomy — which is a huge surgery, removal of an organ for nothing — while the patient with cancer [was] still walking out in the community, not knowing his true diagnosis.”

Here at Patterson Bray, we recently handled a similar type case.  We represented a client who ultimately settled her case for over $1 million after her radiological studies were erroneously mixed up by hospital employees resulting in extensive, invasive procedures being performed on the wrong patient, while the true patient was left untreated.

Click here for the CNN Report with reports to the story.

Reminder for Estimated Tax Filers (Self-employed, etc.)

Reminder for Estimated Tax Filers

For all you estimated tax filers, here’s a friendly reminder that your next payment (using Form 1040-ES) is due this next Wednesday, September 15th.

NOTE:  Estimated taxes are generally paid by self-employed persons, although others are potentially required to file.  According to the IRS website instructions: “Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.”

Interesting Medical Malpractice Series from Local Doctor

Medical Malpractice Series

The Memphis Commercial Appeal had an interesting two-part series about medical malpractice lawsuits written by a local doctor and regular columnist, Dr. Manoj Jain.  He wrote the article from the perspective of recognizing the need for the accountability provided by our medical malpractice system vs. just having had one of his patients send him notice of potential malpractice claim.

While I don’t agree with everything he writes in the two columns, Dr. Jain provides unusually thoughtful, balanced insight for a doctor who is hardly a neutral observer in the fray.  Indeed, he ultimately concludes that the most effective tort reform is simply this: better care and communication by doctors.

How refreshing.  And well worth the read.

Part 1: Threat of Malpractice Lawsuits Means Medicine is a Balancing Act

Part 2: Good Doctor-Patient Relationship Reduces Lawsuits

FYI: Jain also previously wrote an article in 2007 about medical errors and the need for lawyers and lawsuits to hold doctors accountable.

How to Detect Non-Answers

How to Detect Non-Answers

Over the past week or so, I’ve touched on the theme of lying.  First, I posted about an interesting question raised over at the Winning Trial Advocacy Tips blog: Should A Lawyer Call a Witness a “Liar” on the Stand? Second, over at my personal blog (Random Thoughts), I posted yesterday about a link at The Art of Manliness blog titled How to Become a Human Lie Detector.

Well, today I wanted to point you to yet another great blog post over at the Winning Trial Advocacy Tips blog: How to Detect “Non-Answers” During Cross-Examination — although these principles work equally well outside the courtroom in everyday life as well.

Here are the “non-answers” as categorized and demonstrated over at the Winning Trial Advocacy Tips blog:

Non-Answer #1: Completely Avoiding the Issue

Q: Does this skirt make me look fat?
A: I love you.

Non-Answer #2: Describing Expected Procedures

Q: Did you request a CAT-scan?
A: It’s normal procedure to request a CAT-scan in those circumstances.

Non-Answer #3: Saying What You Will Do or Hope to Do

Q: How soon will you have the weaponized virus contained?
A: We’re doing everything we can.

Non-Answer #4: Answering a Question with a Question

Q: Did you lock the store before you left that evening?
A: Why wouldn’t I?

Non-Answer #5: Telling What They’d Normally Do in the Situation

Q: Did you check for tire wear patterns?
A: Normally, I would do that.

Non-Answer #6: Describing What Others Did

Q: Did you find any drugs in the car?
A: We found several packages of cocaine in the center console.
Q: No, what did you find?

Non-Answer #7: Guessing or Supposing

Q: Did you read the warning label?
A: I’m pretty sure I would have.

Non-Answer #8: The Speech or the Argument

Q: I’ll ask for the fourth time. You ordered –
A: You want answers?
Q: I think I’m entitled to them.
A: You want answers?
Q: I want the truth!
A: You can’t handle the truth! Son, we live in a world that has walls. And those walls have to be guarded by men with guns. Who’s gonna do it? You? You, Lt. Weinberg? I have a greater responsibility than you can possibly fathom. You weep for Santiago and you curse the Marines. You have that luxury. You have the luxury of not knowing what I know: that Santiago’s death, while tragic, probably saved lives. And my existence, while grotesque and incomprehensible to you, saves lives…You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want me on that wall. You need me on that wall. We use words like honor, code, loyalty…we use these words as the backbone to a life spent defending something. You use ‘em as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom I provide, then questions the manner in which I provide it! I’d rather you just said thank you and went on your way. Otherwise, I suggest you pick up a weapon and stand a post. Either way, I don’t give a damn what you think you’re entitled to!

Non-Answer #9: Half-Truths or Half-Answers

Q: Did you have a conversation with Moff Tarkin about his plans for the Alderran System?
A: I spoke with Moff Tarkin on numerous occasions.

Q: Did you order the Code Red?
A: I did the job you sent me to do.