If paying penalties to the IRS is something you’d like to avoid, by all means, read on.
Estimated tax payments are typically due in four installments over the year: April 15, June 15, September 15, and January 15 of the following year. Failing to pay by these dates can result in penalties and interest, increasing your overall tax bill. Consult with us at Adams Accounting Solutions to help you determine whether or not you need to file quarterly.
We will calculate the amount of estimated quarterly taxes owed for your unique situation by examining the right financial records and tailor a payment schedule for you. The IRS will impose fines on taxpayers who have not paid a sufficient sum of their tax liability throughout the year. Therefore, if it is logical for your situation, paying quarterly helps you stay ahead of these fines, and avoids you getting slapped with a huge tax bill. So, what are the considerations in deciding?
- Income Source: One of the biggest factors in deciding to file quarterly hinges on your source(s) of income throughout the year.
- Self-employed individuals, small business owners, freelancers, and some landlords and investors are usually candidates for filing quarterly because their income isn’t taxed via their paycheck like salaried individuals.
We’ve all heard that sticking to a budget and planning our expenditures through the year is a responsible move overall, and it only makes good sense for the management of cash flow. Paying quarterly taxes is no different. You are essentially dividing up the amount of tax you owe and paying it in four smaller chunks, so it is not so financially straining. By budgeting your tax liability with the help of Adams Accounting Solutions, you can plan more efficiently and avoid the stress of a huge tax bill.
With tax season looming, it’s common for individuals (especially small business owners) to feel stressed. Paying through the year with estimated quarterly taxes gives you financial peace of mind. By working with the professionals at Adams Accounting Solutions, we will assist you in determining the amount to pay quarterly by precisely examining your financial position, thus leading to more informed spending patterns, business decisions, and a clear picture of both your income and expenses.
Salaried employees, on the other hand, have their employer withholding taxes from their paychecks all year long, therefore quarterly tax payments are often unnecessary because their tax obligations have been met through the withholding from every check.
If you are expecting a refund or anticipate having low taxable income you might not need to pay quarterly estimated taxes. However, call us at Adams Accounting Solutions to ensure you fit into this category, don’t just wing it and hope for that refund and then be disappointed that you actually owe taxes.
Significant investment income may come into play, so if you have other forms of withholding such as investment dividends or significant tax credits that cover your tax liability, quarterly payments might not be necessary. Consult with us at Adams Accounting Solutions to see if your tax liability may have already been met.
In conclusion, whether or not you should pay estimated quarterly taxes is largely dependent on your source(s) of income. You may not want to fool with it because
time and administrative burden are certainly a factor in paying quarterly estimated taxes.
Don’t sweep this important consideration under the rug. Yes, quarterly taxes require keeping detailed financial records and frequent calculations which can be a real pain, especially for those unfamiliar with tax laws. So, trust the pros at Adams Accounting Solutions, and take the burden off your shoulders. We’re just a phone call away!