How Do Quarterly Taxes Work? A Small Business Guide

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If you are running a small business, it’s likely that you are scrambling to pay taxes on a quarterly basis. Taxes are a burden every company must overcome, and set-up businesses don’t fare any better than established multinationals.

Despite this, there is help available. As a business owner, it is important to understand how do quarterly taxes work and what is its impact on your business.

To help you out, we have created this guide on quarterly taxes so that you can start learning everything there is to know. 

What are Quarterly Taxes?

These are also known as self-employed taxes, freelance taxes, and small business owners who do not have taxes withheld from their earnings.

For most small business owners, quarterly taxes are estimated based on their previous year’s tax liability. This means that you will need to calculate your taxes owed for the year, and then divided that amount by four.

When are Quarterly Taxes Due?

Quarterly tax due dates are four times a year:

  • April 15
  • June 15
  • September 15
  • January 15

However, if any of these dates fall on a weekend or holiday, the tax is due the next business day.

You’ll need to calculate your taxes owed for the quarter based on your income and expenses. This can be done using IRS Form 1040-ES.

Once you’ve calculated your taxes, you’ll need to make a payment. This can be done online, by mail, or via wire transfer. 

How Do I Calculate My Quarterly Taxes?

To calculate small business taxes, you’ll first need to determine your estimated tax liability for the year. This includes estimating your income, deductions, and credits for the year.

Once you have your estimated tax liability, you’ll divide that amount by four to get your quarterly tax payment. If you have any questions about quarterly taxes or how to calculate them, you should consult a tax professional.

What Happens if I Don’t Pay My Quarterly Taxes?

If you don’t pay your quarterly taxes, the IRS will charge you interest and penalties. The interest rate is currently 4%, and the late payment penalty is 0.5% of the unpaid tax per month.

The IRS will also charge you a failure-to-pay penalty if you don’t pay your taxes within 21 days of the due date. This penalty is 2% of the unpaid tax.

How to Check Refund Status?

To check the refund status of your tax, you can visit the IRS website and enter your Social Security number, filing status, and the exact amount of your refund. You can also call the IRS refund hotline at 1-800-829-1954.

How Do Quarterly Taxes Work for Your Business?

If you are a small business owner, it’s important to understand how do quarterly taxes work. 

You need to be aware of the deadlines and requirements. Once you know the basics, you can avoid common mistakes and stay on top of your tax obligations. 

To ensure that you are paying the correct amount of quarterly taxes, it is important to keep accurate records of your income and expenses. This can be a difficult and confusing process, but this guide provides helpful information and tips to make it easier. 

Check out our blog for more tax-related articles like this one.

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