Business income is seldom a fixed monthly amount like an employee's salary. Therefore the IRS allows us to estimate our income and pay taxes quarterly. Of course, if you estimate wrong you may end up paying additional taxes at the end of the year.
Find out if you must make estimated tax payments and how to calculate the amount in this detailed explanation of Estimated Taxes at the IRS site.
For US businesses Form 1040-ES is used for most self-employed individuals to calculate how much estimated tax to pay. Estimated tax payments for the current year are normally due mid-month in April, June, September, and the following January.
If are subject to state, county, or city income tax then you may also be required to pay estimated taxes to your state taxing authority. Check the specific provisions for income taxes in your state.
*This feature deals primarily with procedures and resources for US businesses. For other countries see the table on page one.
IMPORTANT DISCLAIMER: Information in this feature article or contained in the links is provided only as general guidance. Neither About nor this Guide can vouch for the accuracy of the advice offered. For specific advice and requirements for your business, please seek the advice of the IRS (or the taxing authority in your country) and/or a qualified attorney or accountant.
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