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Everything You Need to Know About Estimated Taxes in Virginia for 2023

Accounting, Bookkeeping, Taxes

Are you a Virginia resident looking to file your estimated taxes in 2022? If you are self-employed, own rental properties, have investments, or have other income sources, you should be filing estimated taxes to avoid penalties and fees. It can seem overwhelming to try to figure out the process, but understanding estimated taxes in Virginia for 2022 doesn’t have to be complicated. This guide will provide you with information on when and where to file estimated taxes, how to calculate them, and what happens if you don’t file. By the end of this guide, you’ll have a better understanding of estimated taxes in Virginia and feel confident in your ability to file them correctly. Let’s get started!

What are estimated taxes?

Estimated taxes are a way for self-employed individuals, landlords, and others who don’t receive a W-2 from an employer to pay their fair share of income tax. If you are employed, your employer withholds taxes from your paychecks and sends that money to the government on your behalf. But when you’re self-employed, you are both the employer and employee. The government doesn’t get an automatic cut of your income, so you are responsible for making sure you pay what you owe—and that means filing estimated taxes. Estimated taxes are due quarterly, like your income taxes. Those who file estimated taxes are expected to pay what they owe for the year up to that point, so if you miss a payment, you may be assessed a penalty. Even if you have a W-2 income and don’t think you’ll owe taxes at the end of the year, it’s a good idea to file estimated taxes to avoid the penalty.

Who needs to file estimated taxes?

If you have self-employment income, investment income, or income from a rental property, you should file estimated taxes. Other taxpayers who should file include those who have more than $100,000 in income from pensions or annuities, dependents who earn taxable income, or taxpayers expecting to owe $1,000 or more. If you filed a 1040EZ or 1040A tax return in the previous year, you will file Form 1040 for the current year. If you filed a 1040 in the previous year, you’ll file a 1040 this year.

When and where to file estimated taxes in Virginia

If you’re a Virginia resident, you will file your estimated taxes with the Virginia Department of Taxation. Electronic filing is available, but if you file paper, you can mail your forms to: Virginia Department of Taxation, PO Box 2319, Richmond, VA 23261.

If you are a non-resident with Virginia income, you can file online or mail your estimated taxes to: Virginia Department of Taxation, PO Box 1115, Richmond, VA 23218-1115.

How to calculate estimated taxes

There are a few different methods to calculate estimated taxes, so it’s very important to use the right one. You can calculate them using the Rule of 59 or the Rule of 26. Each method takes into account your gross income and other factors, like deductions and credits, to determine the amount you should be paying in estimated taxes. You can also use a worksheet provided by the IRS. One way to avoid penalties for underpaying estimated taxes is to increase the amount you’re paying each quarter. If you’re behind on estimated taxes, the estimated tax penalty is the amount you should have paid for the previous quarter plus one-quarter of the amount you’re behind.


What happens if you don’t file estimated taxes?

If you don’t file estimated taxes, you’ll be charged a penalty. The penalty is 5% of the amount you should have paid for that quarter. The penalty percentage increases every quarter you don’t file until it reaches 25%. If you don’t file estimated taxes, don’t expect the government to just shrug it off. They will likely send you a letter questioning why you’re not filing. If you don’t respond, they will likely report you to the IRS and the state for failure to file. If you don’t file the following year, you could face an audit.

Tips for filing estimated taxes in Virginia

  • Keep accurate records Estimate taxes rely on your ability to track your income. If you don’t keep track of your income, it’s unlikely you’ll be able to accurately estimate your taxes. Keeping good records will help you keep on top of your finances and file estimated taxes correctly. 
  • Use tools and resources available to you The Virginia Department of Taxation has calculators and worksheets you can use to help you estimate your taxes. There are also online tax tools and apps you can use to help you keep track of your income and estimated taxes.
  • Understand how changes to your income affect your taxes When your income changes or you make adjustments to deductions, that could have a significant impact on your estimated taxes. That’s why it’s important to keep track of any changes and report them to the Virginia Department of Taxation as soon as possible so you can make adjustments to your estimated taxes.

What is the Virginia estimated tax penalty?

The estimated tax penalty is the amount you should have paid for the previous quarter plus one-quarter of the amount you’re behind. For example, if you’re four months behind on your estimated taxes and the penalty rate is 5%, you would owe the estimated taxes for the previous four quarters plus 20% of the amount you’re behind. The estimated tax penalty will be reported on your Virginia tax return and be due with your taxes. If you can’t pay the penalty immediately, you can make estimated quarterly payments to the Virginia Department of Taxation.



Estimated taxes are a necessary evil. If you don’t pay them and then end up owing money at the end of the year, you could face a lot of negative consequences. Thankfully, it isn’t that hard to do your estimated taxes if you have a little bit of guidance. This guide will walk you through everything you need to know about estimated taxes in Virginia and help you avoid penalties and fees.

Need help with your estimated taxes in Virginia? Contact us at +1 (718) 218-5558 or to learn more about our services and get expert assistance with your tax obligations.

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