Give Early, Give Often
Among the measures used to help balance the budget for the fiscal year that began July 1 is paying more estimated tax payments sooner.
Prior to this year, taxpayers and corporations paid four quarterly payments of their estimated tax liability of 25 percent each. To help balance the budget in February, that payment schedule was changed to 30 percent during the first two quarters and 20 percent during the final two.
The plan to close an estimated $26 billion hole in the current budget year modifies the schedule again. Beginning with the 2010 tax year, the second quarter payment will increase to 40 percent, the third quarterly payment will be eliminated and the final quarter’s payment will rise to 30 percent.
Proposed by Gov. Arnold Schwarzenegger in the revised budget he presented in May, the move will pull $610 million into the 2009-2010 fiscal year, which ends June 30, two weeks after the second quarterly payment is due.
Of the $610 million, $250 million comes from personal income tax receipts and $360 million from corporate taxes.
Employers will also need to increase the amount of personal income taxes withheld from their employees’ paychecks. Also proposed by the GOP governor in May, this change increases current wage withholding by 10 percent, drawing $1.7 billion of personal income tax receipts into the 2009-2010 fiscal year.
Filed under: Budget and Economy
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