Let’s face it, no one really likes to pay taxes.
Unfortunately, while most Americans don’t like to pay taxes, we know that taxes have to be paid. As a self employed person, and business owner, not only do you have to pay local & state taxes, but you must also make Federal estimated tax payments throughout the year. Whenever I work with Chicago South Loop small business tax preparation customers, I find that they are often very surprised to hear about the estimated tax concept.
The American tax system is a a pay as you go system, not a pay once a year, or pay when you feel like it system. According to the IRS, “taxpayers must generally pay at least 90 percent of their taxes throughout the year through withholding, estimated tax payments or a combination of the two. If they don’t, they may owe an estimated tax penalty.” In most cases, you must pay estimated tax for 2019 if both of the following apply: 1. You expect to owe at least $1,000 in tax for 2019, after subtracting your withholding and refundable credits. You expect your withholding and refundable credits to be less than the smaller of: a. 90% of the tax to be shown on your 2019 tax return, or b. 100% of the tax shown on your 2018 tax return. Your 2018 tax return must cover all 12 months.
If you are a self employed driver (think UBER, LYFT, DOORDASH), contractor, real estate agent, barber, beautician, makeup artist, blogger, home care provider, etc. you need to have an EFTPS® account to make your Federal estimated tax payments. EFTPS® is a system for paying federal taxes electronically using the Internet, or by phone using the EFTPS® Voice Response System. EFTPS® is offered free by the U.S. Department of Treasury, however, you must setup an account to use the system. Listed below are the estimated quarterly tax payment dates for sole proprietors, and the quarterly payment dates for S-corp owners and C-corporations.
Estimated tax payment due dates for 2019:
April 15, 2019: Income tax due date AND the due date for your first quarterly estimated tax (QET) payment. In April, you’ll pay quarterly estimated taxes on the income you made in January, February, and March 2019.
June 17, 2019: This is when you’ll pay quarterly estimated taxes on the income you made in April, May, and June 2019.
September 16, 2019: Quarterly estimated taxes for the months of July, August, and September 2019 are due on this date.
January 15, 2020: Quarterly estimated taxes for the months of October, November, and December 2019 are due on this date.
For those that are S-corps or Corps. Remember that you are considered an employee, and a shareholder. This means that you’ll need to pay your income, social security, and Medicare taxes as the employer & the employee. In addition to making the deposits, you will also need to file quarterly payroll tax return. C-corporation owners will need to file estimated taxes on the corporations income, and file a 941 quarterly payroll return.
Here are the quarterly payroll tax return due dates for 2019:
April 30, 2019: File Form 941 – Employer’s Quarterly Federal Tax Return. If you made all required payments in full by the due dates, you have 10 more days to submit this form (by February 10).
July 31st 2019: File Form 941 – Employer’s Quarterly Federal Tax Return. If you made all required payments in full by the due dates, you have 10 more days to submit this form
October 31 2019 File Form 941 – Employer’s Quarterly Federal Tax Return. If you made all required payments in full by the due dates, you have 10 more days to submit this form.
January 31, 2020: File Form 941 – Employer’s Quarterly Federal Tax Return. If you made all required payments in full by the due dates, you have 10 more days to submit this form.
Although we’ve given you the basics, this is not an all-inclusive article. Should you have tax debt help questions, need Chicago business tax preparation, business entity creation, business insurance, or business compliance assistance please contact us online, or call our office toll free at 1-855-743-5765 or locally in Chicago or Indiana at 1-708-529-6604. Make sure to join our newsletter for more tips on reducing taxes, and increasing your wealth.
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