If you work in a large firm, you have probably heard about quarterly estimated taxes but do you really understand them? To start off, these are some of the charges that you will have to pay to keep your business in full compliance with the law. It’s a federal income tax that requires quarterly payments every year. To calculate it of course you need help from professional accountants who are familiar with quarterly estimated taxes.
Employers tend to hold their employee’s paycheques until they finish submitting all their quarterly taxes. However, if you are self-employed, then it’s upon you to make these quarterly payments. If you feel that you have been overcharged through these taxes, the IRS will either refund you or send you a list of financial details showing the amount you should pay. Though, you can find a great tax accountant to reduce chances of making a mistake when filing your tax.
How Much Should You Pay?
Accountants working in a huge investment firms give this area undivided attention. To know how much you will need to pay, they go through the 2017 tax rate schedule and then calculate your estimated taxes. If you usually spend more than $1000 in taxes the whole year, you need to start making quarterly payments. For instance, if you expect to pay $400000 in one year, every three months, pay $100000.
When Do You Need To Pay?
Tax accountants or any other employee in charge of balancing the company’s books should pay estimated quarterly taxes on time. They are generally paid during the 15th day in the months of January, April, June, and September. However, if they due date is a holiday or weekend, the deadline is automatically pushed to the next business day.
The best way to make these estimated payments is by paying online. Here, you can pay with your card or use the IRS Direct pay services which allow you to send cash instantly from your bank account. Other suitable options include:
1. Money orders or Cheques
2. Same-day wires
Conclusion
The U.S Census Bureau data says that the income of an average household in NYC $50, 711. After you are through making these quarterly payments, don’t forget to record them in the company’s tax estimate file. Also, store all copies of the Forum 1040-ES somewhere safe and accessible. Although it’s a complicated process, with a lot of paperwork, getting everything right will save your company from lawsuits and tax fines.
