How to Pay Quarterly Estimated Taxes

If you're making money, the IRS expects you to pay quarterly estimated taxes if there's no withholding each pay period. This video will sort through how to properly calculate the amount due, plus when and how to make the payments!

Why Small Businesses Should Pay Attention to Quarterly Estimated Taxes:

0:00 What are estimated taxes?
1:03 Do I need to file estimated taxes?
1:55 How do I calculate my estimated taxes?
2:12 3 Steps for calculating estimated tax amounts
3:19 How to calculate income tax
3:37 How to calculate self-employment tax
4:16 Calculating quarterly estimated payment amounts
5:22 Should I pay in equal amounts?
5:33 What is the Safe Harbour Rule?
5:50 What are the due dates?
6:09 How do I pay estimated taxes?
6:21 Who owes estimated taxes?
6:50 Are estimated taxes mandatory?
7:25 What if I miss a payment?
7:49 How can I make estimated taxes easier?
8:01 Should I hire an accountant?

Have you recently become a freelancer or picked up a side hustle? Maybe you’ve joined the millions of Americans in the gig economy.
Congratulations - you’re a small business owner, whether you realize it or not, and you need to make sure you manage your taxes like a business.
Federal tax law is complicated, and it’s easy for a business owner to make simple mistakes that can result in an audit.
Business owners and freelancers pay the IRS using Quarterly Estimated Taxes. Four times a year, workers or business owners who receive tax forms other than a W-2 are expected to make a tax payment directly to the IRS.
When you work a traditional job, employers withhold a small amount from your paychecks to pay the IRS, and you then reconcile the annual total with your deductions and expenses each year in April. However, the rules are a little different for you now.
The government expects you to pay taxes on your income as you receive it. You can’t wait until April to file your taxes and pay it all then. Well, you can, but you’ll also be facing penalties, so staying on top of paying your estimated taxes is critical for small businesses.
Estimated taxes apply to any kind of taxable income that comes to you directly without any tax withheld. That can include interest, stock dividends, capital gains, and anything you earn through self-employment.
Small business owners use IRS Form 1040-ES to calculate annual estimated taxes. We recommend speaking to an accountant or tax preparer if you’re at all unsure of how to estimate your taxes - remember, this is a short video, not an accounting training course.

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