What are quarterly estimated taxes for a business and when are they normally due?
As a small business owner, you might be wondering…
What are quarterly estimated taxes for a business and when are they normally due?
Quarterly estimated taxes are tax payments that self-employed individuals and businesses are required to make to the Internal Revenue Service (IRS) on a quarterly basis. These payments serve as an estimate of the income and self-employment taxes owed by the business for the current tax year.
Who Pays Estimated Taxes?
The quarterly estimated tax payments are generally required if you expect to owe at least $1,000 in taxes for the year, after subtracting any tax withholding or credits. The types of taxes typically covered by these payments include federal income tax, self-employment tax (Social Security and Medicare taxes), and alternative minimum tax (if applicable).
Here is a list of who may need to pay estimated taxes from the IRS website:
Individuals (including sole proprietors)
Partners
S corporation shareholders
Corporations (if they expect to owe $500 or more)
When are the payments due?
The due dates for quarterly estimated tax payments are as follows:
First Quarter: Due by April 15th
Second Quarter: Due by June 15th
Third Quarter: Due by September 15th
Fourth Quarter: Due by January 15th of the following year (for the previous year's income)
It's important to note that if the due date falls on a weekend or a holiday, the payment is generally due on the next business day.
What are the due dates for 2024?
The due dates for quarterly estimated tax payments for 2024 are as follows:
First Quarter: Due by April 15, 2024
Second Quarter: Due by June 17, 2024
Third Quarter: Due by September 16, 2024
Fourth Quarter: Due by January 15, 2025
You can pay all of your estimated tax at once, or in four equal amounts by the dates shown above.
Do I have to pay estimated taxes?
If you are unsure if you have to pay estimated taxes, please check out the IRS guidance for estimated taxes on Form 1040-ES.
Here is a link to the form: Form 1040-ES.
It is best to consult with a tax professional and refer to the IRS guidelines specific to your situation to ensure accurate calculation and timely payment of your quarterly estimated taxes.
