Estimated tax payments are one of the biggest shocks for new business owners. They know that they have to pay taxes, they just don’t realize they have to send in a check four times a year! Most businesses that expect to more than $1,000 – or $500 if the company is incorporated – in taxes have to make estimated payments to the IRS. And, since the next quarterly payment is due on September 15th, we thought it’d be a good idea to do a quick rundown of what estimated tax payments are.
What are estimated tax payments?
Exactly what they sound like. These payments are simply what you’d normally owe on your income. However, since you don’t have an employer to withhold and send in what you owe, you have to do it instead.
Foreign bank accounts are one of the most misunderstood tools of business banking. When people hear about foreign bank accounts, they picture shady, offshore Cayman Island accounts, or the strict, private banks of Switzerland. The reality is much less exciting. There are plenty of reasons why a business would want a foreign account. International banks facilitate international business, which helps pay for foreign contractors, cover payroll, and invest in emerging markets. However, because offshore banking is so heavily associated with tax dodgers, the federal government keeps a close eye on any business with a foreign bank account, and requires entities with such accounts to file an annual Report of Foreign Bank and Financial Accounts (FBAR).
What is a FBAR?
This is a simple form that some entities with foreign bank accounts must file with the Department of Treasury. Officially called FinCEN Form 114, it asks for the filer’s personal information and the information related to any foreign accounts overseen. The bank’s name, type of account, and the maximum value of the account all have to be disclosed. (You can download the form at the Department of the Treasury’s website.)
It’s that time once again: time to whip out the finance books and try to figure out just how much you owe for quarterly estimated taxes, or QETs. More sitting down at the dining room table, going over numbers, scratching your head trying to figure out what this abbreviation stands for…
Wait, you don’t know what this is about? Quarterly estimated taxes are a big part of the small business owner’s life as they’re constantly buzzing around just around the corner, ready to pounce and make a mess. However, many small business owners still manage to forget about them, leading to headaches and possible fines.
Instead of putting them off, read our quick guide so you can get ahead of the game!
Whether you’re a new entrepreneur or an old hand, money occupies a prominent role in your business. Failing to get – and keep – your finances in order can doom your company or consulting practice in the long run. While each entrepreneur has their own set of unique financial challenges, there are several areas where nearly all entrepreneurs can draw from a general well of wisdom.
1. Pay yourself first, Uncle Sam second.
No doubt, you’ve heard the expression “pay yourself first.” That’s good advice for everyone. However, entrepreneurs must remember that with no employer-initiated tax deductions to count on, they must also make provisions to cover self-employment taxes.
2. Hire pros, but know what they’re doing.
You didn’t go into business to spend hours working on spreadsheets. That’s why you hired a Certified Public Accountant. However, you should still understand the basics of keeping the books, if for no other reason than to be able to answer your accountant’s questions at tax time.
The 2014 tax season is here and here at MyCorporation, we’re taking a closer look at taxes in the United States and throughout the world in our latest infographic. Curious about where your tax dollars go? How the state corporate income tax rates vary throughout the U.S. and how they’re compared from all around the world? And what do we plan on doing with our tax refunds this year, anyway? Find out the answers to these questions and more below!
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Think there’s only one way to pay your taxes when you have an amount due? Sure, in years past that was the case. You could send a check along with your filed tax forms and that was pretty much the extent of it. Paying taxes was part of the reason why tax time was such a pain for every hard working person in America.
Now, though, technology has made it where you have lots of options when it comes time to fork over your hard-earned money. However, you can’t utilize them if you don’t know what they are, so we thought we would take a quick look at your options to help you out. One of these should help you comply with your tax obligation with no problem.
It’s the season to get your paperwork ready for Uncle Sam. As you prepare for April 15, be sure to remember the available deductions you can take advantage of as a business owner.
Your taxable profit will be lower the more deductions you take, so it’s in your best interest as a business owner to maximize them, so long as they adhere to the IRS deduction rules.
Most “small” businesses do not provide a 401(k) as a benefit for their employees, but if you can, you have a distinct advantage when hiring. And, a 401(k) plan has several tax advantages. First, your business is generally permitted to take a tax deduction for its contributions to the plan when the contributions are made. Those can be made as a simple match—or—in the form of profit sharing.
When it comes to obtaining a company vehicle, you have a couple of options available to your business – you can opt to either buy or lease. Let’s examine these options in detail.
Buying a car
If you decide to buy a car, keep taxes in mind. Writing off the costs on your taxes can be done in two ways – actual costs or mileage – and there are limits on how much you can take in a given year. If you choose actual costs, you have to do that every year you claim the vehicle; you cannot change your mind later. There are different amounts you can write off depending on the type of vehicle you own, too, whether it is an electric car or an SUV. If you’re looking to invest in a hybrid vehicle for your business, be sure to keep in mind that it will no longer qualify for a tax break.
Just like the annual trip to the dentist, tax season has crept up on us once again. To take the analogy a step further – if you have brushed, flossed, and rinsed as you should, your visit to the dentist will be quick and pain-free (both physically and financially). However, if not, the pain will long and agonizing. Similarly, if you have kept your accounting records in order the whole year with a constant eye on the upcoming tax season, preparation of your accounts will be pain-free (both from a time and cost factor). If not, the auditor may come to pay you a visit.
Thankfully, these days there are numerous tools to ease the burden of preparing all your tax season documentation. The following are five tools that will help you through the tax season with a minimum of fuss.
1. Salary Calculator – If you haven’t been using a salary calculator to assist in calculating what is left of your gross salary after taxes or to extrapolate weekly, monthly, or annual wages from an hourly wage rate, then you have been wasting your time. There are salary calculators freely available online. They are easy to use and are an excellent basis for preparing your tax return.
Let’s just start out by being completely honest with each other, shall we? We all hate, hate tax season! Either we completely despise it or we run around in circles with our hands flailing about just thinking about it. I hated filing my returns too. I procrastinated until the last minute on the dreaded date – April 15th. I felt like there was ticking time bomb, ready to explode somewhere, but let me just wait till 10 seconds on the clock and do something trivial while time flies by. Have you ever felt the same thing? Don’t worry though, tax season does that to you.
I know procrastination can seem like the best idea in the world, but here’s some friendly advice: don’t do it. Just don’t. When it comes to filing your returns, planning in advance really helps. It may even help you reduce your income tax liabilities, because you’re thinking about it more thoroughly than you would if you were filing at the last minute. So, no more last minute fretting. Follow these tips and you’ll do just fine.