Along with the pride and perks of running your own business come the responsibilities, one of which is paying quarterly estimated taxes. Even George Washington acknowledged that "No taxes can be devised which are not more or less inconvenient and unpleasant." Setting some strategies in place, however, can help your quarterly tax process become more convenient for your business.
April 15, 2019 is not just the 2018 tax deadline. For calendar year taxpayers, it's also the first quarterly payment due date for 2019 income taxes. The remaining three federal quarterly 2019 payments are due June 17, Sept. 16 and then Jan. 15, 2020.
When estimated taxes are not paid in a timely and accurate manner, you may be subject to penalties, even if you are due a refund when you file your income tax return. This may mean not enough was paid. Or it may mean not enough was paid in the quarter that it was due. The general rule is that at least 90% of your final income tax is to be paid through your quarterly estimated payments. Of course, there are exceptions to every rule, so consult your CPA to determine your quarterly payment amount.
There are many tax-advantaged investments that may help you reduce your tax liability. Retirement plans, for example, may allow you to reduce or defer your taxes while offering the added benefit of preparing for your future. An Edward Jones financial advisor, together with your tax professional, can help you explore strategies to reduce your total tax bill.
By working to minimize your tax bill and simplify the quarterly IRS payment process, you can rest assured that this process should flow smoothly. Then you can shift your focus to the other 999 details that your small business demands.
Here are some great resources to review this tax season:
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Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.