Paying IRS $5200-$9600

I don't pay quarterly, however, I think the "rookie" is on the right track and I'd recommend it to folks who have a hard time managing their money.
Frankly, I think it's a good idea

 

Furthermore, it's not $5200 to $9600 out of your budget. Its what you're going to pay and should be included in your budget.

 

It’s a good idea if you don’t put any money back into the bussiness I guess. I spend money on the company and preventative maintenance. Some people just piss money out the window and give it to the feds. Tell your hubby to replace all those brake chamber instead this year.

 

Over 5 years we've been on and off with quarterlies on the advice of the CPA.

We paid about 9k in taxes this time around, after no quarterlies last year, and are now back on paying quarterlies of 2k odd, which will probably result in a refund next year and then we'll be back off paying quarterlies again. Sigh.

Either way - they'll get what's due.

We set aside 15% of gross to an account earmarked for state and fed.

Another way of looking at it - which I like - If they see you've paid quarterlies and payroll on time during the year then they're more likely to 'see' you as a lower audit potential for the fact you're current and at least 'aware' of your tax liability. I would think they would look harder at the guy that files extensions, makes payments etc. Just a personal view.

A buddy 'prepaid' his last year - just gave them $14k in February last year in anticipation.

And for the argument of "They get all that interest" - unless you're investing in the stock market, the average CD or savings account pays jack.

 

Quarterlies are required unless you want to get a small penalty for not doing them.

Some people don’t have the discipline to hold the money back so it’s wise to pay estimated payments. If you end up owing less they’ll refund you.

I didn’t do it the first 4 or 5 yrs I was in business but did take a penalty for not. Nowadays we do it and yes it’s painful but just part of doing business in the great ol US of A.

 

For the record. Quarterly payments are based off your tax’s paid on your last years adjusted gross income divided by 4.

For example: if your tax’s on your AGI after expenses and deductions was $10,000. That means the following year your quarterly estimated payments would be $2500

 

10k on a 60k profit is reasonable