Estimated Taxes
Q1 and Q2 estiamted taxes are due
July 15th, 2020.
What you need to know about Estimated tax payments
Estimated payments are the tax payments you make four times a year if you are self-employed or expect to owe more than $1,000 in federal taxes for the year.
Other income you might pay estimated payments on includes; interest, dividends, rents, alimony, unemployment
compensation, and the taxable bit of Social Security benefits.
They're estimates because the amount you pay is what you think you will earn for the year.
You should at least run figures to see if you should pay estimated tax payments if you file as a sole proprietor, a partnership, a corporation, an S corporation shareholder, and/or self-employed.
Dates to know for 2020
Covid has messed with the schedule this year so things looks a little different, but here are the dates you need to know for 2020 payments.
Q1 and Q2 to July 15,2020
Q3 is Oct 15, 2020
Q4 Jan 15, 2021
Urgh, I don’t want to pay out now….
There are benefits of paying estimated payments now!
Firstly, you have no late penalties (which is what happens if you should've paid quarterly and didn't, and it takes most people by surprise, or you may not even know as your tax preparer just wraps it in to your payment amount!). This is one of the easiest ways to make sure yoyu’re not overpaying unneccesary costs.
Secondly, - and possible more importantly - no searching for $ 000's of dollars at tax time next year. It pays to be ahead of the game!
Calculate your payment amount by forecasting your household W2 and self-employment income. Your business books need to be as up to date as possible to make it as accurate (I can help with that!). Look at your deductions and withholding and the difference is the amount you could owe. Then divide this into 4 quarters and you have your estimated payment amount-
You want to avoid or at least limit, over or underpayment as much as you can.
(Don't forget to pay estimated state taxes if applicable!)
Ok, how do I pay?
The firs thing to know here is that you are paying it personally and not your business. As a pass through entity, this is your personal liability and not the businesses. That being said, to pay your federal estiamte, you’ll need to register (if you aren’t already) with the IRS’ EFTPS.
The state requirements vary, but usually you can create online accounts with the state(s) required and complete everything online.
OR
For $49, we can calculate your estimated taxes for you!
Here’s a list of what we would need:
The most recent pay stub for W2 employment
Up to date profit and loss
statement for business income.Info about your filing status, and any changes to your
circumstances including number of dependents.And then we’ll do the magic for you and even walk through the payment process online with you.