frontmann2004
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you can pay them quarterly based on your estimated tax bill or at tax time like everyone else.
The IRS can require and does prefer the quarterly approach. If they do not assess any interest on you while paying at normal tax time then there is no consequence in holding on to your greenbacks as long as possible. I look at it as an interest free loan from Uncle Sam.
Contact your CPA though to really cover yourself.
I pay at tax time and have for the last couple years being self employed with no consequence or recourse (as of yet). |
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Sir Ed
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It depends on your income. Quarterly is better as you are less likely to end up owing money at the end of the year and may also be liable for additional penalties and interest. If you have any employees you may also have to pay workers compensation insurance.
Invest in a good bookkeeping software like Quickbooks or Peachtree, and hire a C.P.A. as soon as you can. Most businesses fail due to cash flow or tax problems. A good C.P.A. can help you from falling into one of those traps. |
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Mandy A
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Depends what the IRS says you can do. They expect quarterly taxes, but if you make below a certain amount, they seem to be ok with filing it yearly. Been there done that. Oh, if you do decide to pay it all at the end of the year, they slap you with penalties. |
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msthinkpositive
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If you ask me, you'll taking a chance waiting till the end of the year. It's best to pay estimated if possible, or quarterly if not. Holding off till year's end may cause you interest and penalties from IRS. There is that possibility if you haven't been told before. |
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helzapopin
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I am self employed and I only pay on april 15. I asked the IRS about this when I went into business and was told it was ok but that I would have to pay penalties and late fees. This works for me because I don't make a huge amount of money and the fees are like cheap interest on money. Good to put a little back as you go along so you don't have to come up with it all at once. |
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hichefheidi
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they shouldn't slap you with penalties, because you aren't late by paying at the end of the year. You should put money aside for your taxes in a Money Market so you can grow your money over the year, and then pay at the end of the year. That's what the government does with your money if you pay as you go. That's like an interest free loan. |
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gigasrex
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Either, The form for self employed people is a 1099form. I suggest you keep every receipt for every purchase. You never know where the new deductions will help. |
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KariM
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Making estimated payments quarterly is usually good, but it depends on how much you make. A good rule is to pay in 110% of the prior year's taxes by paying in a chunk each quarter. if you make a majority of your income for your self employed business at a certain time of year make your payment then. Any money withheld through your W-2 (or a spouse's) counts as being paid in at the same rate daily throughout the year. (So $365 witholding from pay total for the year would count as a dollar for every day). |
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norris724
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i am self employed. and i file an estimated form. it will save you money. there are severial deductions you can take, hotel/gas/food/car maint etc... depends on what you do. SAVE ALL reciepts. |
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branjo_70
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If you do not pay estimated tax payments or if your estimated tax payments are insufficient, you may have to pay an estimated tax penalty when you file your return. (I'm surprised no one else has mentioned this!) |
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cricket31076
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My husband is self-employed and we always file our taxes at the end of the year. You can also pay quarterly, which would probably be easier. We just do it the hard way. |
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laura
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You can file qaurterly or at the end of the year. If you do not have a lot of deductions it would be better to file qaurterly. |
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michael d
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you can pay it quarterly or at the end of the year, i suggest quarterly, hurts less. |
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