For independent contractors and small business owners who pay quarterly taxes, another important date is right around the corner. The final quarterly payment for 2018 income taxes is due on January 15, which is now less than one month away.
Some contractors and business owners struggle to budget throughout the year or fail to keep accurate records of their financial transactions. Those mistakes can cause major issues when taxes come due, which can in turn lead to unnecessary fees and penalties.
Keep reading to learn more about quarterly taxes, including how you can file and pay accurate taxes on time at crucial dates throughout the year.
Workers owe taxes on all income they earn or receive throughout the year, but most traditional employees choose to withhold some or all of their state and federal taxes. However, most small business owners and many independent contractors (including sole proprietors, partners, and S corporation shareholders), must make four estimated quarterly payments by specific dates during the year.
In general, the following types of taxpayers must make estimated payments:
In addition to taxes owed for earned income, contractors and small business owners usually must pay taxes on income received from interest, dividends, capital gains, prizes, and awards as well as self-employment taxes (Social Security and Medicare).
You shouldn’t think of quarterly payments as a burden. Quarterly payments can help you stay on top of the taxes you owe at critical points during the calendar year while also helping you avoid cash flow problems during tax season. If you don’t pay enough estimated taxes, you could face penalties for late or insufficient payments, so it’s important to stay focused all year and make your payments on time.
Here are the estimated quarterly tax due dates for 2019:
Individuals who need to make estimated quarterly tax payments can use Form 1040-ES while corporations should use Form 1120-W to determine the amounts for their payments. All payments can be made online, by phone, or through the mail.
Contractors and business owners who find that they’ve overpaid can credit their tax refund from the previous toward the next year’s estimated quarterly taxes. If you have an outstanding balance at the end of the year, you must settle that debt when you file your annual return in April.
Don’t let the prospect of paying quarterly taxes stress you out. If you budget accordingly and gather all the relevant records and receipts, making the four quarterly payments shouldn’t cause you trouble. And if you do fall behind, contact the skilled and experienced tax resolution experts at S.H. Block for help.
If you’re an independent contractor or small business owner who needs help organizing and paying your quarterly taxes, S.H. Block Tax Services is here to help. Our attorneys and support staff have decades of tax-related legal experience and have earned an A+ rating with the Better Business Bureau.
To learn more about us or receive answers to your pressing tax questions, please contact us today to schedule your free consultation. Just fill out our convenient online contact form or call (410) 872-8376 and we’ll respond within 24 hours to discuss your current situation and your options for a resolution.
Tax season is rapidly approaching, and quarterly estimated taxes are due throughout the year, so please don’t wait — contact us today to get the most out of your hard-earned income.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject. Please read our full disclaimer here.
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