re: Rep. Ferderica Wilson doesn’t think people prepay taxes

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Also people who aren’t sure if they’ll quality for tax credits. Maybe something like a historic building tax credit which involves a lengthy process and governmental review and has to verify you hit all of their requests in planning and eventually in construction. It can take years to go through the whole process. But only people who work in real estate development would qualify for those

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This is a good point, never considered the historic tax credits aspect. In theory, if I apply for the credits for a project in 2014, but it does not get approved until 2016; do I amend the 2014 return and either get a return or carryforward the overpayment; or do I apply the credits to the 2016 return?

When discussing how could he "owe" so little in taxes, I assumed it was a combination of business loss carryforwards, paid quarterly throughout the year, he only paid taxes on money he was actually paid and not what the businesses earned (i.e., taxes paid at business level, not his personal level).

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Also people who aren’t sure if they’ll qualify for tax credits.

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Business owners, who are on a cash basis, have to make estimated tax payments each quarter. Those payments are safe harbored (in other words if they are not enough there will be no penalties) if they are high enough to cover a certain percentage of the previous year’s taxes.

In short, many business people make quarterly estimated payments that are essentially pre-paid.