Hello, fellow freelancers and small business owners! I’m Bette Hochberger, CPA, CGMA. As the September 15th estimated taxes deadline approaches, I wanted to hop on here and give a quick guide to estimated tax payments.
We know that navigating taxes can feel like solving a secret code. But don’t worry – I’m here to be your tax translator and guide you through the world of estimated tax payments. Let’s make this whole process a breeze!
Understanding Estimated Tax Payments
Think of estimated taxes as small, manageable portions of your annual tax bill. Let’s break it down in simple terms:
Who Should Pay: If you think you’ll owe $1,000 or more in taxes, estimated tax payments are your thing.
How to Do the Math: Estimate how much money you’ll make, then set aside a fraction to cover your taxes for each quarter. You can use estimated tax payment calculators online, which will help a lot.
Dates to Keep in Mind: Mark these dates in your calendar – April 15, June 15, September 15, and January 15. These are the due dates for quarterly estimated tax payments.
Avoiding Tax Troubles: Staying on top of your payments and paying the right amount keeps you away from any tax-related despair . Aim to pay roughly 90% of this year’s taxes or 100% of last year’s (110% if your income goes over $150,000).
Simple Tips for Navigating Estimated Taxes
Track Your Money: Write down what you earn and what you spend. This keeps you in the loop about what’s coming in and going out.
Predict Your Earnings: Give it your best guess about how much you’ll earn in a year. This helps you figure out the right amount to set aside.
Use Tax Benefits: Look into deductions that can lower your taxes. Less tax means more money stays in your pocket!
Be Ready for Tax Time: Keep the money you’ll need for taxes in a separate account. This way, when tax day arrives, you’re prepared.
Seek Help When Needed: If taxes still sound like a puzzle, talk to someone who knows their stuff – like me, your friendly tax pro!
Why Getting This Right Matters
No Extra Charges: Paying the right way means no surprises from the tax folks and no extra fees.
Smoother Cash Flow: By spreading out your payments, you make life easier on your wallet.
Better Business Planning: Paying as you go makes it simpler to manage your business budget.
Paying taxes as a freelancer or small business owner doesn’t have to be a headache. Follow the steps in this guide, and you’ll master estimated tax payments like a pro!
Remember, I’m here to help you untangle any tax-related knots – so wave goodbye to stress and schedule a meeting with me today!
As always, stay safe, and I will see you next time.