Form IN-114: Vermont Estimated Tax Payment Voucher
Form IN-114, also known as the Vermont Individual Income Estimated Tax Payment Voucher, is a document used by Vermont residents to submit estimated tax payments to the Vermont Department of Taxes (VT).
Who Needs to Use Form IN-114?
You generally need to use Form IN-114 if you expect to owe $500 or more in Vermont income tax after withholding. Withholding refers to the amount of tax your employer takes out of your paycheck and sends to the state on your behalf.
Here are some scenarios where you might need to file estimated taxes:
Self-employed individuals: If you run your own business or freelance, you are responsible for paying estimated taxes throughout the year.
Investment income: If you earn significant income from dividends, interest, or capital gains, you might need to pay estimated taxes.
Income from multiple sources: If you have income from multiple sources, such as a job and a side hustle, you might need to pay estimated taxes.
VT Department of Taxes Guidelines
Vermont follows the IRS estimated tax payment guidelines. These guidelines require taxpayers to pay estimated taxes quarterly throughout the year to avoid penalties and interest charges.
There are two main options for estimated tax payments:
A. 100% of the prior year's tax liability: This is a safe option, especially if your income is consistent year-over-year.
B. 90% of the current year's tax liability: This option requires a bit more estimating on your part, but it can be beneficial if you expect your income to increase significantly in the current year.
How to Use Form IN-114?
Step 1: Download the Form: You can download the latest version of Form IN-114 attached below.
Step 2: Complete the Form: Fill out the form carefully, including your name, Social Security number, tax year, and estimated tax payment amount.
Step 3: Detach and Keep the Worksheet: The form includes a detachable taxpayer's worksheet. Keep this for your records.
Step 4: Make the Payment: You can make your estimated tax payment electronically through https://myvtax.vermont.gov/ or mail a check or money order along with the completed voucher to the address listed on the form.
Due Dates for Estimated Tax Payments
April 15th: First quarter payment
June 15th: Second quarter payment
September 15th: Third quarter payment
January 15th of the following year: Fourth quarter payment
What happens if I don't pay estimated taxes?
If you don't pay enough in estimated taxes throughout the year, you may face underpayment penalties and interest charges when you file your tax return.
Can I make one large estimated tax payment instead of quarterly payments?
No, you cannot make one large payment. Estimated taxes must be paid in installments throughout the year.
How do I know if I need to pay estimated taxes?
The Vermont Department of Taxes offers an online income tax withholding calculator to help you estimate your tax liability http://tax.vermont.gov/individuals. You can also consult with a tax professional for personalized advice.
What if my income fluctuates throughout the year?
If your income fluctuates, you can adjust your estimated tax payments throughout the year based on your current income projections.
Where can I get help with Form IN-114?
The Vermont Department of Taxes website offers a variety of resources to help you understand estimated taxes and complete Form IN-114. You can also contact the department by phone or email for additional assistance.