Real Talk: I Missed the Estimated Tax Deadline. What Should I Do?

Life gets busy when you’re running your own business.  If you missed the estimated tax deadline, don’t worry.  At least you’re conscious of the date and you know that estimated taxes exist.

If the date passed you by, here are some things you should know:

• You may not owe estimated taxes. Generally, if you don’t expect to owe $1,000 or more in taxes for the year you don’t need to pay estimated taxes so you may be off the hook if you missed the date.  If you expect to owe $1,000 or more you should pay estimated taxes or you may see a tax penalty for the quarter that the estimated taxes were unpaid.  You can use QuickBooks Self -Employed all year to easily track your income, expenses, mileage and figure out your estimated taxes before taxes are due.
• You may be able to avoid estimated tax penalties.  If you’re like most self-employed business owners you may see slow months and then big boosts in others.  The IRS realizes this may be common so they allow you to use the annualized installment method at tax-time to reflect your fluctuating income and avoid estimated tax penalties.  If you do not receive income evenly throughout the year your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method.  The annualized method determines your estimated tax liability as your income accumulates throughout the year instead of dividing your entire year’s estimated tax liability by four as if your income was earned evenly. So, if your income is concentrated, for example, in the fourth quarter of the year you may be able to annualize your income.  TurboTax Self-Employed guides you through the annualized installment method at tax-time.
• Another estimated tax deadline is around the corner.  Although you may see a penalty if you missed the last estimated tax deadline, remember there is another estimated tax deadline coming up on September 15.  You can use QuickBooks Self-Employed to figure out what your tax liability should be to date and catch up your payment on the next estimated tax deadline.
• Your tax liability may be lower than you think.  Owning a business not only has the perks of being your own boss, but you are also eligible for tax deductions and credits you may not be aware of.  Expenses like advertising, marketing and the actual expenses for business use of your car can really lower your tax liability.  You may be eligible to take so many business deductions you may not owe $1,000 or more in taxes for the year that require you to make estimated tax payments.

QuickBooks Self-Employed will help you easily track your income, expenses, mileage, and capture receipts so you can figure out your estimated taxes before the due date and at tax-time your information will easily export to your schedule C in TurboTax Self-Employed.

2 responses to “Real Talk: I Missed the Estimated Tax Deadline. What Should I Do?”

1. 

   MY 17 YEAR OLD DAUGHTER HAS BEEN HIRED BY OUR CHURCH TO CLEAN. SHE MAKES 165 DOLLARS EVERY 2 WEEKS. WHAT IS HER RESPONSIBILTY AS IT RELATES TO TAXES AND HOW MUCH SHOULD SHE PUT BACK IN ORDER TO HAVE THE REQUIRED AMOUNTS? THANK YOU

   Reply
   • 

     Hi Julia,

     If your daughter is an employee then she will have taxes withheld from her bi-weekly paycheck. Since she will most likely still qualify to be your dependent here are some income requirements for filing a tax return for dependents.

     1. A dependent whose gross income is only earned income (income from wages) must file a return if the gross income is more than $12,000 for the year Or has Unearned income (Investments, Interest or Dividends, etc.) of $1050 or more

     However, she may want to file a return even if not required to do so in order to get any refund due.
     If any taxes were withheld from her income, such as withholding on wages or retirement plan distributions, etc.
     Even if she doesn’t have a tax liability then she is entitled to a refund of the tax money that was withheld.
     The IRS will keep it unless a tax return is filed.

     Thank you

     Reply