All individuals, not just businesses, must pay quarterly income taxes.
That's right. If you as an individual or as a business earn any income other than employment income, you must pay quarterly income tax.
The rule is that you must pay 90% of your current year's tax liability (or 100% of the prior year's tax liability) in 4 equal installments to avoid paying a penalty at the end of the year. However, that doesn't always make sense especially if you only earn income in certain quarters. In that case, you can pay estimated tax based on actual earnings and can request the IRS to waive the penalty.
Quarterly taxes are typically due on the following dates:
Q1 (January, February, March) = due April 15
Q2 (April, May) = due on June 15
Q3 (June, July, August) = due on September 15
Q4 (September, October, November, December) = due on January 15
If the due date falls on a federal legal holiday, then payment is due on the next business day.
You don't need to file any tax return with your payment, just make the payment online or mail it with a voucher. Mailing is not recommended given the IRS's current paper backlog.
You can make the online payment using this link: https://www.irs.gov/payments. If you pay from your bank account, there is no fee. If you pay with a credit card, there is a fee. When making the payment, select "Estimated Tax" as the reason.
And of course, don't forget to make quarterly payments to any state where you did business!
Not sure if you need to pay, how much, or how? No worries. We can calculate how much you owe and assist you in making the payment. Help is one phone call away: (612) 440-3988.