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Paying Quarterly Estimated Taxes

As a small business owner myself, I can't stress enough the importance of making your quarterly estimated tax payments in a timely and consistent manner throughout the year.

Having your own business or working as an independent contractor can be wonderful, but it can also cost you quite a bit if you aren't responsible and timely in sending in your estimated tax payments to the IRS and state taxing authorities.

I also think it's important to pay your quarterly estimated taxes as they become due, so that you have a good grasp on how much money your business is actually making after you account for taxes, which is probably one of the biggest expenses of your business operations.

Along this line, it's also very important to keep accurate books and records, so that you can have a clear picture of how your company is performing on a regular basis and can make adjustments to your estimates if needed.

An up-to-date profit and loss statement is what I would use to calculate your quarterly estimated taxes due, so if you don't have a bookkeeping system in place, I would highly recommend reaching out to a professional. I refer my tax clients to ADR Business Services in Canby. Angie Rayburn is the owner and she is very knowledgeable and easy to work with.

I can't directly help you pay your estimated taxes, as that involves sensitive financial information and secure payment systems. However, I can guide you through the process and provide you with resources to make it easier.

Here are some steps you can take to pay your estimated taxes:

1. Determine if you need to pay estimated taxes:

  • Generally, you don't need to pay estimated taxes if you expect to owe less than $1,000 in tax for the current year after withholding and refundable credits.

  • You can use the IRS Withholding Estimator to see if you need to make estimated tax payments:

  • If you are a tax client of mine, I can calculate your estimated taxes for you and tell you the amounts you should send in to the IRS and state taxing authorities. However, the responsibility is still yours to actually make the payments when they are due.

2. Choose your payment method:

3. Make your payments on time:

  • Estimated tax payments are due quarterly, with due dates on April 15, June 15, September 15, and January 15 of the following year.

  • You can avoid penalties by making your payments on time. The due dates for estimated tax payments are a little different than the actual tax deadline. If you miss it by a day or two, it's not a huge deal, but if you skip an entire quarterly payment, you may be subject to underpayment penalties at the end of the year, even if you end up not owing any additional tax when you file.

  • The IRS system is what's called a pay as you go system which means you' are supposed to be paying in periodically throughout the year and not waiting until the end of the year to pay your balance due.


Additional tips:

  • If you're self-employed, you may need to make estimated tax payments for Social Security and Medicare taxes as well as income tax. This is what is referred to as "Self-Emplyment Tax" or "SE tax".

  • You can adjust your estimated tax payments throughout the year if your income or deductions change.

  • If you overpay your estimated taxes, you will get a refund when you file your tax return.

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