Filing Quarterly Taxes
Created by FindLaw's team of legal writers and editors | Last reviewed September 26, 2022
When you own your own business, you have the ability to take a vacation without having to get it approved and come into work and leave pretty much whenever you want. However, being a small business owner also comes with a lot of responsibilities to customers, employees, partners, and the government. Your main responsibility to the government is to pay your taxes, some of which may need to be paid quarterly.
The taxes your business owes will depend on several different factors, including your business structure and location. Certain types of businesses, such as those involving alcohol, must pay certain excise taxes. If you have employees, you will have to pay employment taxes and withhold a portion of your employees' paychecks. This article focuses on the act of filing quarterly taxes, which may be a requirement for your business.
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Who Needs to File Taxes Quarterly?
Your quarterly tax obligations will be based largely on your business structure and whether or not you have employees. For example, if you started your new business as a sole proprietor, and you don't have any employees nor did you pay out any wages, the Internal Revenue Service (IRS) does not require you to file any quarterly forms. Of course, this doesn't mean that you don't have to file any taxes. You are still required to file your annual income tax return, which is due in April. When filing your annual income tax return, you must report the profits and losses of your business. You must report the profit and loss of your business annually by filing form Schedule 1040C, either adding or subtracting the balance from any other income you may have.
Businesses that do have employees will need to file taxes on a quarterly basis with Form 941. These taxes will consist of the federal income, Security, and Medicare taxes withheld from employees' paychecks. In addition, if your business is subject to excise taxes, you will need to file these quarterly with Form 720. Please remember that this article describes the quarterly filing requirements for federal taxes. Your business may also have to file periodic taxes for your state taxes. Please refer to your state laws to find out your state tax obligations.
Other Actions to Take Quarterly
Although filing quarterly taxes may not be a requirement for you, note that you need to pay enough income tax throughout the year to cover your income tax bill. Your bill will include a self-employment tax, which is your contribution to Social Security and Medicare. Filing your quarterly estimated tax returns in advance is wise because you avoid paying interest and penalties in April. Filing quarterly estimated payments also allows you to spread out the payment throughout the year instead of having to make a large, one-time payment, which can be hard on a small business. You will need to use Form 1040-ES to file these estimated tax payments.
For more information about small businesses and their tax obligations, please visit FindLaw's Business Taxes section.
Have Questions About Filing Quarterly Taxes? Get Legal Help
While it's important to make sure that your taxes are accurate when filed, even more important is ensuring that you're fully protecting yourself from needless tax exposure. If you have any questions about filing quarterly taxes, or would like help figuring out the tax obligations of your business, you should contact a skilled tax lawyer in your area.
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