With the regular 2018 tax season over, most of us are breathing a sigh of relief, but it doesn’t mean that we can slack off! Staying on top of your taxes is a year long process, but it doesn’t have to be a stressful one.
Whether this tax season was a breeze for your small business, or it was traumatizing and you considered the white flag, we have a way for you to keep your taxes in line and out of mind!
How do you know if you need to pay quarterly estimated taxes?
If you are a sole proprietor, S-Corp shareholder, or self employed, you generally have to pay quarterly taxes.
If you will owe $1000 dollars or more in taxes, you should definitely be paying quarterly tax estimates.
Why do we pay quarterly and not just once a year?
This cuts down on penalties from the IRS. It also allows your small business to plan accordingly for four smaller expenses instead of one large yearly expense.
If you are an employee or if you have employees, another important part of taxes is the withholding that you have taken out of your regular pay. Correctly calculating your withholding can prevent you from owing taxes at the end of the year and it will allow you to minimize the amount of your money that the government has control over.
Ideally, you don’t want over-withhold so much money that you have a huge return, because that is an interest-free loan to the government (albeit probably a small one). It’s your money, you should have access to it.
Go HERE to see the IRS withholding calculator!
Go HERE to see the updated W-4 for 2019, for either yourself or your employees!
Of course, tax brackets and deductions have changed again for 2019, so we’ve provided a chart below so you can compare the 2018 and 2019 information so you can figure out where you will be for this year.
As you can see, the standard deduction has increased slightly from last year. There are still no exemptions this year.
The tax brackets percentages have not changed, but the monetary value of each bracket is slightly larger than in 2018
Looking forward to a new season and fresh challenges? So are we! We can’t wait to here about your business plans in our Facebook Group.
Don’t be a stranger, because we’ll be back soon with the first part of our guide for freelancers later in the season!
Disclaimer This article presents general information and is not intended to be tax or legal advice. Refer to IRS publications and discuss possible tax deductions with your tax preparer.
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