Does Anyone Pay Estimated Tax?
 

Just curious. I got a package this year (first time I got anything from the IRS since I started relying solely on this for income), with quarterly stubs and I think a letter that I understood to say I was required to pay estimated tax by certain dates if I intended to pay over 1000 dollars in taxes (how could you not?) when they were due. I'm not registered as a corporation or even an LLC yet.

Just curious if anyone else pays this, how much they are probably expecting throughout next year each quarter and how much you pay (not amounts of course LOL, just percentages.) I'm more concerned with how little I can get away sending them throughout next year without them climbing up my ass. I've always paid at the end of the year (by april 15th) and never had them bugging me yet.

LOL - I always thought the biggest worries about the feds were for obscenity laws and that they went after people in this industry living West of the Rockies, North of Frisco, East of the Mississippi and South of Atlantic City, but I guess the IRS isn't something to mess with either if it can be helped.

Thanks

That is bullshit you don't need to pay them quarterly only annually. If you do it quarterly you maybe missing out on investment money to play with.

Just keep track of all expenses and if it looks like you making too much. Invest, Invest, Invest.

Okay, well, maybe it's a new law, and I'm the first one to get the package this year! Definitely wanting to hear more about this. I know corporations operate this way all the time, but didn't think they were required to.

If you follow the penalty calculation table you'll see you will be penalized if estimated is not paid quarterly unless you claim all the income came from the last quarter of the year.

Yep its always been that way, if you are self employed, you can be penalized when you file your tax returns if you don't:

http://www.irs.gov/businesses/small/...110413,00.html

That is not accurate. The IRS is pretty clear on what makes you fall into the "required" status, and you can be penalized for not doing so or for underpaying.


I personally do 30% quarterly, then in September, my accountant reviews where I am for the year, and advises me on how much to pay from then on.

Some corp classes have to pay quarterly and pay big.. If they over pay they get a credit for the next quarter.

" If you do not pay enough by the due date of each payment period you may be charged a penalty even if you are due a refund when you file your tax return. "

Going offshore is essential. Use someone you trust. Hint!

Yeah, thanks. I have no problem with this and was planning on doing it, especially since they actually made a point of sending me the material.

What if I only send them like 10% and catch up in the last quarter? I'll still get penalized and it's better to pay more? How do you estimate or is that what you're accountant is for? I don't really want to hire an accountant just yet, although it's been going through my mind. I'm still just an affiliate.

Gotcha. This answers the last question I just asked. Thanks

Sorry, didn't mean to sound like a bitch, I just wanted to be clear that imho,generally speaking, when the IRS tells you do to something, it is not bullshit. :)

I'm just an affiliate too, operating as a sole proprietor. In my eyes, my accountant is cheap. I do my own books all year long, with her answering questions when I have them. Then at the end of the year, I hand her a spreadsheet, and she takes it from there. I think she charges me $250 annually for this. I can write her fees off, and she will be the one to deal with the IRS, should I ever get audited.

Underpaying is not good. There are some free tools online to help you figure it out. Also, you can look for IRS Form 1040-ES to use as a guideline.

Or hit me up on icq sometime. :) Also, I pay my quarterlies online, so it is pretty painless. Except for the handing-over-the-cash part, of course. :winkwink:

I pay in every three months and if it's too much or too less depending on how the year went things are adjusted at the end.

Take your total tax bill from the year before and divide by 4. If you do not pay at least that quarterly and you owe that or more, you will pay a penalty. You do not need to pay more then the year before even if your income goes up substantially.

If your income is going down, you would need to calculate how much and pay less accordingly. Or pay the same as above and collect a rebate.

Write yourself a loan to share holder, paid every quarter. Leave it in the company bank, at the end of the year give the money back on the company on the books in the last quarter of the year. If you make no money each quarter, you don't owe any taxes until the end of the year.

same here...

I had to pay penalties the first year I started working self-employed in the adult industry because I didn't know to file quarterly. I was not pleased.

Feds are just like a massive corporation, they need cashflow as well. I just use previous year estimates and adjust as needed if there's a shortfall or increase in profits.
WG

Been that way as long as I have been self employed or owned a Corp/LLC.


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Wasn't taking it that way at all. Thanks.

I used to have an accountant back in the late nineties when I was screenwriting, and then I took a 9-5 (after a fashsion) and lost track of her. She was good for the entertainment business.

I thought this was going to be temporary but it's been three years now I 've been doing this exclusively. Mostly doing my own taxes online and probably ripping myself off so I'll have to start looking into things. I think I have been getting charged penalties and probably not even realizing it LOL.

Thanks again

This is the easiest and according to my accountant least likely to get you an audit so that's what I do.

I pay quarterly on my corp.