Taxes Tax Payment Estimated Tax Payment Paying Quarterly Tax Payment

Many people have a dream to be self employed. What they don’t realize is that you have to do much, much more work being self employed. When employees complain about their bosses, they overlook all the things that happen in the boss’s office. One of the major things that an employer has to deal with is taxes. 

While it is obviously not just an American problem, taxes are always a flash point topic whenever American politics come up. If you wake up, drink your coffee, go get in your car and proceed with your mundane commute to work, you are like millions of people all over the world. You complain about your job and dream of walking out the door, never looking back, and starting your own business.

Taxes. In many people’s opinion, they are the root of all evil. They do serve important purposes but they also tend to pay inflated government salaries and such. This doesn’t change the fact that everyone has to pay them. You pay them when you buy something, when you make money, pretty much anytime money legally changes hands.

If you are self employed, you are solely responsible for taking care of the tax issue yourself. Since it is so complicated, having a professional on your side is invaluable. These professionals will give you the same basic advice as you will get here.

You know you are going to have to pay taxes on the money that is made at your business. The days when you received a W-2 from your employer that had all the information you needed and all you had to do was fill out a form from the IRS (form 1040) are gone. When you are self employed (with few exceptions) you are not going to get a refund from the government. You will end up writing them a check instead.

In the U.S. April is known as tax time. This doesn’t change. Every year millions of people wait until the very last minute to try and get all their information in order and file on time. 

If you are keeping your financial records in order (which is vital to running a business), you will know what kind of money you have coming in and going out. Other things like expenses, tax write offs, and and other things, should be kept in order. If you do this, and stay in the habit of doing it, it will make your tax time much less stressful.

By keeping track of your finances, you will have a rough idea of how much you will owe in taxes. Why is this so important? You can pay your taxes quarterly. It is a guarantee that the IRS doesn’t mind getting their money early. It is a lot easier to figure out how much you have to pay in taxes for a 3 month period rather than for a full year.

By estimating what you owe and making that payment, you are taking care of a problem earlier. Even if it turns out to be the same amount, most people would rather write several smaller checks instead of one large check. Since these payments are estimates, you may not be exactly correct.

Come tax time in April, you may have to pay a little more than the previous amounts but it will still be less than the single lump sum. If your estimate is over what you owe, you may luck out and actually get some of your money back.

Overall, making several estimated payments will lower the amount you pay each time as well as put you in the good graces of the IRS. This may not seem like a big deal but anyone who has ever had tax problems can agree, it is better to have the IRS on your side than as an enemy.

Keep your records in order, estimate what you owe quarterly, and make the smaller payments. It will be one less thing to stress about. When you are self employed, you will find that there is plenty of other things to stress you out. Doing this one little thing will make your dream of being your own boss just a little bit easier to attain.

Although taxes are a big deal, making estimated tax payments really will make things easier. Lower your stress and enjoy the freedom of being your own boss.