Pay 4th State Estimate in December to Deduct
Be sure to pay your January state estimated tax payment by December 31st to get the Federal deduction for this year’s tax return. This has two benefits, it decreases the tax for the current year and decreases the Federal estimates due for the following tax year. Note: If you believe your income has increased and you will owe taxes with your State return in April, you should increase your 4th quarter estimate for payment in December. However, keep in mind if you are subject to AMT there may be no benefit to prepaying your state taxes.