Estimated Tax Payments
When starting a new business or getting compliant with your business taxes, you must pay estimated tax payments. If you have never heard of the term, “Estimated Tax Payments” you have come to the right place.
The IRS requires that you pay estimated tax payments throughout the year, at varying times. The IRS wants you to treat your business income just as a W-2 paying job. Pay your taxes to the IRS as you accrue income. Every time you pay yourself from your business, you pay the IRS first, then you pay yourself. Do not save paying your taxes until the end of the year. This is how most of my clients get to my office.
Taxpayers who believe they can just pay their taxes at the end of the year, usually do not have the money to pay the taxes as they expected. Additionally, failure to pay estimated tax payments can result in penalties. Taxpayers get used to a higher standard of living when they forget to pay the estimated tax payments. Taxpayers believe all the money they make in their business; they get to spend. This is absolutely incorrect. Do not get caught up in this trap. Pay the IRS every time you pay yourself. The estimated tax payments can be set up online with the IRS through the EFTPS.