Call us: (724) 359-5022



Quarterly Tax Planning

  • By Lauri Paxton
  • 15 May, 2017
The American taxes are a pay as you go system. This means that taxes are to be paid throughout the year. Many employees do not realize this, because as an employee, your employer is withholding taxes from your pay check to continuously pay your taxes for you throughout the year.
However, if you are like many business owners and you enjoy being your own boss, you also must pay your quarterly tax estimates. It is important to understand the rules as they determine what you owe and which penalties may be assessed for not being paid on time.
Except if you’re tax exempt, most small business owners who operate their business as an LLC, an S Corp., a partnership, or sole proprietorship will need to file quarterly taxes. Keep in mind that tax law does have exemptions for every rule, so doing your homework or working with an accountant or bookkeeper can help to determine if you fall under that exception.
A few questions can help to answer if you are tax exempt or not.
  • Do you expect to owe over $1000 in taxes this year, after subtracting any income tax withholding and credits from your total tax?
    • If the answer is no, you are not required to pay estimated tax.
    • If the answer is yes, continue to the next question.
  • Do you expect your income tax withholding and credits to be at least 90 percent of the tax you’ll owe for the year?
    • If no, you are not required to pay estimated tax.
    • If yes, go on to the next question.
  • Do you expect your income withholding and credits to be at least 100 percent of the tax shown on your last year’s return? If your last year’s adjusted gross income was more than $75,000 for married, filing separately, or $150,000 if filing single, would be 110 percent.
    • If no, you are not required to pay estimated tax.
    • If yes, you need to pay estimated tax.
Another option when filing joint tax returns is, you may have the ability to use withholdings from a spouse’s job to avoid owing estimated taxes or worse, receiving a penalty. This is possible due to how taxes are collected from your spouse’s employer. Because taxes are continuously collected throughout the year, it eliminates the need to pay quarterly tax estimates. If you have planned to have enough sufficiently taken out of your spouse’s income you may be able to avoid the necessity to pay quarterly tax estimates.
In any scenario, if you are unsure on whether you need to be paying quarterly taxes, or if you are ok to just pay your taxes year end, contact your accountant or bookkeeper. They will be able to help you along the way making sure to avoid any penalties or late fees that can be received. While paying taxes can be a hassle, doing it the right way can help to keep you on the road to success.
By Lauri Paxton 16 May, 2017
As summer approaches, you are either the type of business that thrives or pulls back for the slowdown of summer. Summer is a very hit or miss time for businesses depending on what industry you are in, and where you are located.
By Lauri Paxton 15 May, 2017
The American taxes are a pay as you go system. This means that taxes are to be paid throughout the year. Many employees do not realize this, because as an employee, your employer is withholding taxes from your pay check to continuously pay your taxes for you throughout the year.
By Lauri Paxton 11 Apr, 2017
Like many Americans, you most likely have been squirreling money away for years to prepare for the day that you will be able to retire.  We always tell people that you are never too young to start to save for retirement.
By Lauri Paxton 10 Apr, 2017
Are you one of those who are quickly approaching the deadline to file your taxes on April 18 th ?  Don’t panic because you are not the only one.  If you are avoiding filing your taxes based on not being able to pay the full amount you owe, you may want to rethink your strategy.
By Lauri Paxton 16 Mar, 2017
The phone rings. You see a number that you don’t recognize, but pick up the call anyway. An agent claiming to be from the IRS says that you owe back taxes and threatens to arrest you or file a law suit against you if you don’t make an immediate payment over the phone. Thousands of Americans faced this exact situation in 2016. This is a prime example of an IRS scam.
By Lauri Paxton 15 Mar, 2017
If you are one of the thousands of people who started to drive for ride share companies such as Uber or Lyft, then this may be the first year that you are filing your taxes as self-employed. You have enjoyed the ability to make your own schedule, work when you want, and make decisions to help improve your income. But what does all of this mean for your taxes?
By Lauri Paxton 13 Feb, 2017
When you go to your doctor there is a baseline where your medical team will start to determine if you are healthy or if you are in need of medical attention.  Vitals such as blood pressure, temperature, weight, cholesterol etc. are monitored regularly.
By Lauri Paxton 10 Feb, 2017
As the New Year has gotten underway and you finish your tax preparation, it is time to look ahead to the remainder of 2017 and beyond. While all of your company’s financial information is fresh in your head, it is a good time to look back at how far you have come and plan for the next few years.
By Lauri Paxton 20 Jan, 2017
As an entrepreneur you have probably found that traveling is an inevitable part of growing and running your business.  How you spend your time traveling can have an impact on your productivity.  Whether you are running down the street to a meeting or traveling across the country to work with a client, smart and efficient traveling can help to better use your time and keep your company growing.
By Lauri Paxton 19 Jan, 2017
Are you one of the 55 million people in the United States that freelance for a living or freelance as a side job? According to the Monthly Labor Review, the freelance surge is the Industrial Revolution of our time. Some common freelance jobs include technical jobs, professional services, graphic design and professional writing. If you are one of those people who work for themselves, do you consider yourself a business owner or do you consider your side job a hobby?
More Posts
Share by: