It is that time of year again. We’re halfway through 2013 and second quarter taxes were due on Monday June 17th (the 15th was a Saturday).
For any Small Business Owner just starting out, keeping up with your books, employing good accounting practices, and using checks and balances are not enough. It is also critical that you keep up with quarterly taxes as well.
Quarterly payments help to keep you from having underpayment penalties at the end of the year. If this is your first year in business, it’s probably easiest to start by consulting your local tax office for the proper procedures, documents and guidelines. If this is not your first year, you can utilize last year’s income tax return as a guide for this year, making sure to adjust for changes. Be sure to apply current income tax rates, account for Social Security tax, Medicare tax, and possible net investment taxes.
First Quarter taxes are due by April 15th, unless it falls on a weekend at which point the next business day is the due date. Second Quarter of course would then be June 15th, Third Quarter September 15th and Fourth Quarter January 15th (a month later so people can accurately account for all income – we suggest that people make these payments by 12/31).
If a Small Business Owner fails to file their taxes by the quarterly date, they just need to be sure they file their taxes as soon as possible. The taxes can be filed electronically by the end of the day of the due date.
If filed without the penalty, the IRS will advise how much is missing after tax returns have been calculated, then payment can be made at that time. If any payments are late and there is more than a 10% underpayment, the IRS will charge a penalty (assuming an adjustment worksheet wasn’t filed).
It’s important to note that, if a small business is late on its Fourth Quarter tax payment, there is a grace period. It is possible to just pay by January 31st without penalty. An IRS form 2210 can be filled out to calculate the amount of the penalty depending on how late the small business may be on their Quarterly payments. This way they are able to figure out the penalty on their own.
As always, if you have any questions about which forms are required, or if you are past due, don’t hesitate to contact Lescault and Walderman at 866-496-2042.
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