How to Avoid Penalties on Your Estimated Taxes as a Small Business Owner

I don't know anyone who LIKES taxes, let alone penalties on taxes.

So how do you avoid penalties on your taxes as a small business owner?

One of the first things to be aware of is the need to file estimated tax payments.

Who needs to file estimated taxes?

When are estimated taxes due?

How much do you need to pay to avoid a penalty?

I answer these questions in this week's video.

With every episode of Linda Tuttle Adventuring Accountant TV, I like to equip you with a free resource that goes with the episode for the week.  

This week's episode is all about estimated tax payments.  One of the biggest ways to reduce tax penalties is to maximize your deductions so you are paying the least amount in taxes (legally of course).

After going through this guide, you will have a better idea of what deductions are available to you as a small business owner.

You can download the FREE resource by clicking the orange button above.

How to Avoid Penalties on Your Estimated Taxes as a Small Business Owner

Did you know you can be charged a penalty EVEN if you pay the full amount of your tax due on time?  

It may not be a surprise to you the IRS likes to receive taxes due on time.

When you work as an employee, you are having withholding taken out of your paycheck on a regular basis with each pay period.  So you are making your payments equally throughout the year.

When you have your own business or a side hustle, you may need to make estimated tax payments.

Who needs to file and pay estimated taxes?

In most cases, you must pay estimated tax for 2023 if both of the following apply. 

1. You expect to owe at least $1,000 in tax for 2023, after subtracting your withholding and refundable credits. 

2. You expect your withholding and refundable credits to be less than the smaller of: 

a. 90% of the tax to be shown on your 2023 tax return,
b. 100% of the tax shown on your 2022 tax return

When are estimated tax payments due?

April 15 

June 15

September 15

January 15

If the 15th falls on a weekend or holiday, the date may be different.

You can make your estimated tax payments by mail, online, or through EFTPS.

Have questions?  Let me know!

Resources Mentioned

Profit Booster Crash Course - Learn More Here

You can download this FREE resource by clicking the yellow button below 👇

Linda Tuttle
Linda Tuttle

I hope you found value in this post. I share a new weekly training here on the blog each week for you, with different topics to help you grow your business and maximize your income so you can live the life you want as you prepare for retirement. If there are topics you would like me to cover, let me know.

Leave a Reply

Your email address will not be published.