If you’re a small business owner, tax time is enough to give you a migraine. Chances are good that your tax time also comes quarterly, and figuring out how much you owe to Uncle Sam is something you’ve got to sort out by yourself.
I don’t envy you. What I can offer is a useful article that might give you a little help navigating the the taxation minefield.
Intuit is a willing guide through the process, giving you four easy steps to follow to avoid getting mired in tax hell. Let’s break them down, shall we?
- Bank it. Intuit recommends you set aside 30 percent of your income in a separate bank account, one that you can avoid touching until you know what’s happening with your taxes. That ensures you’re prepared for whatever the Internal Revenue Service throws at you, be it additional taxes or ninja stars.
- Calculate. If you’ve been around longer than a year and pulled down less than $150,000, Intuit advises you to examine your 1040 total tax form from the last year, subtract any total withholding, divide that number by four and send out a check quarterly for that amount.
- Seasonal save. If your business is seasonal in nature—say a boating tour business on a lake—you can pay a percentage of quarterly earnings, instead of the same amount every quarter. I’ll be kind, like Intuit, and link you directly to the form at IRS Form 2210.
- The miracle of technology. Filing online will save you ink-smudged hands and time, and as Intuit notes, it’s even possible to set up automatic quarterly payments that requires you only to keep track of your money. If you set up the separate bank account, you’ll have that ready anyways.
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Photo credit to flaivoloka at http://www.sxc.hu/photo/1120747
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