{"id":1507,"date":"2018-10-30T06:37:57","date_gmt":"2018-10-30T06:37:57","guid":{"rendered":"http:\/\/www.internationalhrs.com\/?p=1507"},"modified":"2018-11-05T10:45:31","modified_gmt":"2018-11-05T10:45:31","slug":"new-us-income-tax-rates-trumps-tax-cuts-jobs-act-affect-already-2018-u-s-tax-payment","status":"publish","type":"post","link":"https:\/\/www.internationalhrs.com\/en\/new-us-income-tax-rates-trumps-tax-cuts-jobs-act-affect-already-2018-u-s-tax-payment\/","title":{"rendered":"New US income tax rates under Trump\u2019s Tax Cuts & Jobs Act affect already the 2018 U.S. tax payment"},"content":{"rendered":"

Introduction: <\/strong>The U.S. tax system applies the \u2018pay-as-you-earn\u2019. Therefore, there is a direct withholding system set up by American companies to meet this tax withholding requirement. If one works in the U.S., the American employer is required to withholding taxes and submit these withholdings to the Internal Revenue Services. As most of our clients work for non-U.S. business companies, there is no possibility to implement such direct tax withholding. However, there is the estimated tax payment system that is available to meet this income tax payment requirement.<\/p>\n

Who is subject to U.S. estimated tax?<\/strong> U.S. estimated tax is mandatory for U.S. taxpayers who are not subject to U.S. tax withholdings. This is equivalent to provisional tax in Switzerland. It is important to note that insufficient payment of the estimated tax will trigger \u2018Underpayment Penalty\u2019 <\/strong>(discussed below).<\/p>\n

How to figure and when are estimated tax payments due?<\/strong> One will need to estimate his\/her U.S. income tax based on his expected taxable income, tax liability and credits determined for the period. \u00a0Payments are due on a quarterly basis with the following due dates:<\/p>\n

Estimated tax for the period:<\/u>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Due date:<\/u><\/p>\n

01 Jan to 31 March\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15 April<\/p>\n

01 April to 31 May\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15 June<\/p>\n

01 June to 31 August\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15 September<\/p>\n

01 September to 31 December \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15 January of the following year<\/p>\n

Underpayment penalty: <\/strong>Estimated tax needs to be paid on the above-mentioned due dates as income is earned for the period covered.\u00a0 Non-payment or insufficient payment may arise to Underpayment Penalty<\/strong>.\u00a0 In general, one can also use as what we regard as the \u2018Safe Harbour\u2019 rule.\u00a0 Under the safe-harbour rule, one can use the smaller of:<\/p>\n