If you’re a small business owner, a big tax mistake that you can make may have nothing to do with filing your return. It could be related to failing to make your estimated quarterly tax payments. Failing to pay your quarterly taxes could lead to penalties.
Make Quarterly Payments
Estimated taxes are your responsibility if you are a small business owner or self-employed individual who expects to owe more than $1,000. When it’s time to send in your quarterly payment, simply estimate what you owe for that quarter. Payments are due on April 15th, June 15th, September 15th, and January 15th. You are required to pay estimated taxes on any income not subject to withholding.
Failure to Pay
If you do not make estimated tax payments or don’t pay enough throughout the year, you could be subject to penalties. You are required to pay 90% of your estimated tax liability. The penalty depends on how much you owe the IRS and how long it takes you to pay the balance due.