Paying quarterly means that, at the end of the year, you aren’t presented with a jaw-dropping tax bill. It saves you from end of year sticker shock For the sake of your business, avoiding payments isn’t worth it in the long run.Ģ. If you ignore the rules and pay in a lump sum, you are pretty much guaranteed to get penalized. The IRS is serious about quarterly payments. Estimated taxes don’t have to be complicated-and there are ways you benefit from paying them. If you’re thinking of ignoring quarterly payments altogether, and just crossing your fingers and paying a lump sum at the end of the year, pause to reconsider. The four benefits of paying your quarterly estimated taxes Luckily, there are ways to make sure you don’t get penalized for underpaying. If you pay too little, you could get charged extra by the IRS. If you pay too much, you’ll get the money back as a tax refund. That’s where the “estimated” part comes in. Since you haven’t filed your tax return yet, it’s impossible to say exactly what you owe. Remember: You’re paying taxes for the current year in which you’re operating. Expect to owe over $1,000 in federal taxes (or $500 for corporations).Rather than paying all your taxes in a lump sum at the end of the year, you pay them in installments over the course of the year.

Quarterly estimated taxes include all the taxes your business owes the IRS for the year, split up into four parts. This overview gives you everything you need to know to file estimated taxes the right way.

While sending a tax payment to the IRS every three months may sound like a hassle, it can actually benefit your business.ĭone right, quarterly estimated taxes give you a chance to get a better grip on your financials, and avoid nasty tax season surprises. If you run your own business, chances are you need to pay quarterly estimated taxes.

When are quarterly taxes due 2021