Mini Biz US – Small Business USA

Do you need to File Quarterly with the IRS?

Simple Online Taxes

If you work as a normal W-2 wage earner, then federal taxes are automatically withdrawn from your paycheck. However, if you are self employed, you probably receive your income on a “1099″ basis, and no taxes are taken out. It is your responsibility to file your taxes and make payments. In order to make the system “fair” (LOL), the IRS has determined that just because you are self employed, does not mean you should have the use of your money until yearly tax time comes around, and so you should make quarterly payments with an estimated amount. In fact, if the April tax filing date rolls around, and you have seriously underpaid, or not paid at all, you could be liable for penalties!

If you have no idea how to estimate your taxes, you have a couple of options. You can go by last year’s tax payments if you expect your income to be similar. The IRS provides an online tax estimation tool which is reallly for regular W-2 employees, but can be useful for self employed people too. In fact, if you are a do it yourself sort of small business owner, go ahead and read the IRS document on quarterly filing.

If you are still confused, you may want to consult a tax professional. You can e-file taxes for free, but you may have to pay for tax estimation software, online tax forms, or a professional consultation.

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This entry was posted on Thursday, January 17th, 2008 at 5:07 pm and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.