If you’re a small business owner, you have probably had some experiences with the hassle of completing your quarterly business taxes. As the owner of a business, you are responsible for withholding taxes from your employees’ paychecks, rather than having this taken care of for you. Since taxes aren’t automatically deducted, it is your responsibility to calculate the amount of taxes you are responsible for paying to the government on a quarterly basis in addition to your annual tax filing. Here are some tips to help you with quarterly tax submission:
- Set aside estimated tax payments: It’s always best to be prepared to pay your taxes by setting aside money into a separate account that is specifically designated for tax purposes. When estimating how much should be placed into this account, determine the percentage of your business’ gross income that you will owe in taxes and maintain an estimate that gives you plenty of breathing room. It’s better to have more money set aside for your quarterly taxes than to realize you underestimated your expenses once you’ve already filed.
- Use last year’s numbers as an estimate: If your business is over a year old, you can use your tax filing information from last year as a basis for your quarterly estimated taxes. Take a look at your annual tax total, subtract anticipated withholdings and divide the number by four in order to determine an estimate of what your quarterly taxes might be. While this estimate might not be entirely precise, the IRS will not penalize you since this payment is considered a “safe harbor” payment.
- Take changes in cash flow into account: If the revenue flow of your business changes based on the season or is inconsistent for any other reason, remember that each of your quarterly tax payments does not necessarily have to be the same. During slower quarters, you can pay a smaller percentage and then make up the difference during the quarters where you bring in more revenue. When working with this tax payment method, it is important to ensure that you remain compliant with all relevant IRS rules and regulations. It is a good idea to invest in professional tax preparation in Des Moines, IA for help with negotiating complicated tax processes.
Get help with quarterly tax preparation in Des Moines, IA
Filing taxes can be a complicated and confusing process for a small business owner, especially if you have had trouble with the process before. The best way to ensure that you remain compliant with tax regulations and that your quarterly taxes are handled accurately is to get professional assistance with tax preparation in Des Moines, IA. Save yourself the headache of trying to figure out quarterly taxes on your own, and let the team of tax professionals at Accounting & Tax Professionals, PLC walk you through the process. Give us a call today and schedule an appointment with our knowledgeable team for help with all of your tax and accounting needs.