tion. Quarterlies are not usually optional. Business owners are required to file quarterly if
they expect to owe at least $1,000 in taxes for the current tax year, after subtracting any
withholding and credits. They are also required if the business expects withholding and
credits to be less than the smaller of 90 percent of the tax to be shown on your current
year’s tax return, or 100 percent of the tax shown on your prior year’s tax return. Plus, get
your estimates wrong and you will be penalized.
When using a standard January to December accounting calendar, taxes are due as
follows: For the period of January 1 to March 31, taxes due April 15; for April 1 to May
31, taxes due June 15; for June 1 to August 31, taxes due September 15; and finally, for
September 1 to December 31, taxes are due January 15 of the following year. Failure to
file quarterlies can also result in penalties.
Business owners can also make monthly estimated tax payments using the same tax
form (1040-ES) as they would for quarterly payments. Additionally, business owners can
setup recurring monthly payments using the Electronic Federal Tax Payment System
(EFTPS).
Depending on the state you live in, you may also need to make quarterly state income
tax payments in addition to federal taxes. Also, be sure to check with your accountant,
since there might be unique local tax laws that require additional payments.
Tips for (Relatively) Painless Taxes
Relatively painless taxes might be an oxymoron. Nobody I know likes paying taxes every
three months or more, and digging deep into their pockets is not a pleasant experience.