How To File Quarterly Taxes

If you’re self-employed or a business owner, chances are one of the biggest gripes you have about your job is filing taxes. Since you don’t get them taken out of your paycheck as an employee would, you have to figure out taxes all on your own.



Choosing the right accounting software can help you estimate your taxes, but you’ll still have to go through the process of paying them. Here’s a guide to make filing your quarterly taxes a breeze.







Who Is Required To File Quarterly Estimated Taxes?



If you’re a freelancer, independent contractor, or single business owner who makes over $1,000 annually, you have to pay your estimated taxes every quarter, in addition to filing your taxes annually. 







What Do Quarterly Taxes Include?



There are two categories:




Self employment tax – 15.3% for Medicare and Social Security Tax (if you are a self employed person you pay the employer and employee portion or all of it.)



Income tax – Taxes at your income tax rate






How To Calculate Your Estimated Quarterly Taxes



You’ll start by figuring out your taxable income, equal to your gross income minus any deductions for which you are eligible.Once you have your taxable income, you can use IRS form 1040-ES for individuals or form 1120-W for corporations to calculate your estimated taxes. This amount will include your income tax, as well as a self-employment tax. Divide your annual tax burden by four to calculate your quarterly taxes.








Pay Your Estimated Taxes By The Deadline Each Quarter



Quarterly estimated taxes for 2023 are due on April 18, 2023 for the first quarter, June 15, 2023 for the second quarter, September 15, 2023 for the third quarter, and January 16, 2024 of the following year for the fourth quarter. If you fail to pay your estimated quarterly taxes by the deadline each quarter, you could face a penalty from the IRS.








Anticipate Changes In Your Income Or Expenses



Few businesses have consistent income and expense levels from quarter to quarter. You’ll want your quarterly estimated taxes to reflect your business’ finances each quarter. Otherwise, you could end up underpaying or overpaying, both of which can trigger a penalty.



You can do this by anticipating major changes to your income or expenses and saving money for your tax payments accordingly.








How To Pay Quarterly Taxes



You can pay your taxes in any of several ways:




Pay online – You can go to https://www.irs.gov/payments and pay by selecting ‘Pay now with direct pay using your bank account” or “Pay now with card or digital wallet using a credit card.”



Pay by phone – You can enroll in the Electronic Federal Tax Payment Service (EFTPS) and, using a voice response system, pay your taxes over the phone.



Pay by app – The IRS2Go app can be downloaded right on your phone or tablet.



Pay by cash or check – The address is on the tax form.








Information provided on this blog is for educational purposes only , and is not intended to be business, legal, tax, or accounting advice. The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. While Lendio strivers to keep its content up to-date, it is only accurate as of the date posted. Offers or trends may expire, or may no longer be relevant.



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