When you work for someone else, you don’t have to worry about withholding taxes. Your employer does it for you.
When you run your own business, on the other hand, you’re entirely responsible for withholding taxes, both for you and your employees. To withhold these taxes properly, you must make quarterly estimated tax payments.
The question is: how do you pay quarterly taxes? Even more importantly, how can tax services assist you in doing so? We’re going to cover both questions in detail below.
Understanding Estimated Tax Payments
When you work for someone else, they withhold your taxes for you. As such, you only have to worry about what you owe or are refunded at the end of each tax year. This makes the process extremely simple.
When you run a business, on the other hand, you’re responsible for withholding taxes for yourself and your employees. The way you withhold these taxes is by submitting estimated tax payments before the given dates.
Your estimated payments should be based on your revenue and tax liability. So, if you owe 15% of your revenue as taxes, you should submit 15% of what you’ve made thus far before each quarterly deadline.
This not only helps to keep you organized throughout the year but it also helps you to avoid late payment penalties. If you don’t pay quarterly taxes, you could very well be subject to interest and fees at the end of the tax year. Depending on how much you still owe, you could have to pay fees of hundreds and maybe even thousands of dollars.
When Are Quarterly Taxes Due?
Though there is sometimes some variation in date, generally speaking, quarterly taxes are due on the dates of April 18th, June 15th, September 15th, and January 17th.
You can submit these taxes to the IRS either through the mail or online. If you’re interested in paying online (this is the easiest way), follow this link.
Note: Depending on where you live and do business, you might also have to submit quarterly state taxes. Like federal taxes, state taxes can generally be submitted online. Consult with your state’s tax department for more information.
How a Tax Service Can Help You With Your Quarterly Taxes
Taxes are complicated. Not only are they dictated by a variety of different laws, many of which are changing from year to year, but they’re also difficult to keep tabs on. As a small business owner, it can be difficult to truly understand your tax liability.
This is why it’s often wise for small businesses to utilize professional tax services. Tax pros offer a number of services that simplify the tax payment process. When using accounting services for your taxes, you’ll receive the following benefits:
By Figuring Out Your Tax Liability
If you want your quarterly payments to be accurate, you need to understand your tax liability. To understand this, you must have an idea about how much money your business brings in. You must also understand the various taxes that are levied against you.
A tax service understands tax law to the tee. As such, they’ll have no trouble understanding your overall tax liability. They’ll also track your revenue over time to ensure that you’re paying the right amount of estimated taxes at every quarterly deadline.
By Helping You Keep Your Tax Liability to a Minimum
When you do your taxes on your own, especially as a small business, you’re prone to missing out on certain credits and deductions. When you do this, you essentially increase your tax liability and thus lose money.
By using a tax service, however, you ensure that you get all of the relevant credits and deductions. This is because tax services understand the tax laws associated with different types of business entities and will ensure that your business doesn’t miss out on any of them.
By Assisting You in Choosing a Business Entity
When you run a business, you must choose one of a few different business entity types. These include sole proprietors, limited liability corporations, C Corp, and S Corp. Each offers different advantages but comes with different tax laws as well.
The business entity you choose will directly affect how much you owe in taxes. Fortunately, your tax service can help you choose the right entity for your business, thus ensuring that you pay as little in taxes as possible.
By Helping You Avoid Fees and Fines
When running a small business, you have the potential to stumble into all sorts of tax-related legal issues. Not only do you have to worry about underpaying quarterly taxes, but you must also ensure that you’re properly withholding taxes for your employees.
If you’ve never done these things before, you could very well make mistakes. With a seasoned tax service on your side, however, you’re at almost no risk for mistakes. Your tax service will be well aware of the tax law and will do everything in its power to prevent you from incurring fees and fines.
Looking for Tax Services for Your Business?
Paying your business taxes properly is of utmost importance. If you pay your taxes improperly, you could be subject to substantial fines and fees. This is why it’s vital to your professional tax services.
Looking for tax services in Charlotte NC? Look no further than Basta Croop. We provide tax planning and tax resolution services to countless Charlotte area businesses. Regardless of your cash flow situation, our accounting services can assist you.
Contact us today to get the process started!