From the IRS: “Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.”
The link above is a good guide as to who needs to pay estimated tax and when. Once you determine if this tax applies to you, the next step is to determine when it is due. The most important part of this is ensuring these payments are made on time to avoid penalties.
If you’re running a small business you have a lot on your plate, and we know tax issues can be confusing. But remember, we are always available to help you. Contact us at (913) 888-9100 with your questions. We would be happy to meet with you to review your business accounting and help determine a schedule that is appropriate for your situation.
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.