Paying quarterly taxes on your business how to do this

Do you need to pay quarterly taxes on your business?Do you even know if you need to pay quarterly taxes on your business?Here's how you can figure out if you need to pay quarterly taxes on your business.If you do need to pay quarterly taxes on your business, here is how you can do it properly so that you do not get in trouble with the government.

How to tell if you need to pay quarterly taxes on your business
The people who need to make estimated quarterly tax payments are those whose income tax withholding will not end up covering your tax liability for the next year.The people who generally need to pay estimated quarterly tax payments are those people who are self employed, those people who are landlords, and also investors.If you fall within these categories, you need to make estimated tax payments to the government every three months.You need to make these quarterly payments because otherwise any income tax withholding that is made for another job may not cover your federal income tax by the time that the year ends.You do not need to be nervous about paying quarterly taxes, however.You can figure out your quarterly taxes in about an hour and keep all of your payments up to date.

How to pay quarterly taxes on your business

The very first thing that you need to do in order to pay quarterly taxes on your business is to get out your most recent tax return.Now that you have out your most recent tax return, you need to look at the two most important lines on your tax return: your total tax and your withholding.If you filed Form 1040, then the total tax will be listed on line 62 and the withholding will be listed on line 63.

Now that you have found your total tax and your withholding, it is time to subtract the two figures.Take the total tax and subtract the withholding.The answer that you get is your unfunded tax liability.

Now that you have figured out your unfunded tax liability, divide the number by four if you are going to make quarterly payments.If you are going to make monthly payments, then divide the unfunded tax liability by twelve.

Now that you have figured out the amount of your quarterly payments, you need to make your payments every three months.All estimated tax payments are due by April 15th, June 15th, September 15th, and January 15th.However, if you are expecting a significant increase in your income or decrease in your income, then you should calculate your estimated quarterly tax payments based on your projected total income for the year.

Now, if you are self employed, you are going to have to estimate two different taxes:your regular income tax and your self employment tax.The way that you can calculate your average tax rate is by dividing your income tax (which is line 43 on the tax form 1040) by your adjusted gross income (which is line 37 on tax form 1040).Now take your average tax rate to the self employment tax rate of 15.3%.Multiply this percentage of 15.3% by your quarterly net profit.This calculation will help you figure out how much estimated tax you need to pay.

Now you need to mail your estimated quarterly tax payment to the IRS Service center.The form that you need to use is Form 1040-ES.The check must be made payable to "United States Treasury."Ensure that you remember to put your social security number on your check.

There is another way that you can make your estimated tax payments, however.You can use the Electronic Federal Tax Payment System, which is called the EFTPS.The Electronic Federal Tax Payment System is an online bill pay where you can pay your federal taxes.You can use the Electronic Federal Tax Payment System in order to set up monthly payment automatically, so that you can always count your monthly payment into your monthly budget and you can have everything taken care of automatically.The Electronic Federal Tax Payment System also allows you to print out a report of all of your payments, so that you have all of those records easily available and readable come April 15th.