Quarterly Taxes (or estimated taxes) are how self-employed individuals have to pay their taxes to the IRS throughout the year if your income exceeds a certain amount. If you own a business and your business is profitable, you need to pay quarterly taxes each quarter to avoid underpayment penalties.
Generally speaking, you'll divide your tax liability for the previous year by four, and the net result will be your estimated payments for each quarter. However, due to the pandemic, tax position for many businesses has changed drastically compared to previous years. We have good news and we have bad news, the good news is your Q1 and Q2 payments are not due until July 15. The bad news is you still need to pay quarterly payments. In this video, we go in detail to show you how to calculate your estimated tax payments.
If you need help, please do not hesitate to call us at (832) 295-3353, or you can also set up an appointment with us at https://xqcpa-bookme.acuityscheduling.com/schedule.php.