Are You Ready for Your Third-Quarter Estimated Tax Payments?

As summer fades, and we enter the final month of the third quarter, it’s time to ensure your finances are in order. The September 16th deadline for estimated tax payments is fast approaching—are you prepared?  

Who Needs to Pay and Why?

Estimated tax payments are crucial for self-employed individuals, freelancers, small business owners, and others who do not have taxes automatically withheld from their income. 

If you expect to owe $1,000 or more in taxes for the year after subtracting your withholdings and credits, you’re required to make these quarterly payments. Neglecting this obligation can lead to underpayment penalties and interest charges, so it's vital to stay on top of it.

Step-by-Step Guide to Calculating and Submitting Your Third-Quarter Taxes Using QuickBooks

To make the process easier, here’s a simple guide to calculate and submit your third-quarter estimated taxes using QuickBooks:

1. Know Your Taxable Income and Expenses
• Begin by gathering your income and expense reports for the third quarter. QuickBooks Online makes it easy to pull these reports. Navigate to the “Reports” section and select the relevant income and expense reports to get a clear picture of your taxable income.
2. Calculate Your Estimated Taxes
• Once you have your income, subtract any allowable deductions and credits to arrive at your taxable income. Use the IRS’s estimated tax worksheet or QuickBooks’ tax calculator feature to estimate your tax liability for the quarter.
3. Submit Your Payment via the IRS Website
• Head to irs.gov/payments to submit your estimated tax payment. You can choose to pay directly from your bank account, by debit or credit card, or through the IRS mobile app.
4. Keep Records
• After submitting your payment, save your confirmation and ensure that your QuickBooks records reflect the payment to stay organized for tax season. 

• Pay on Time 
• Missing the September 16th deadline can result in penalties. You can set a reminder in QuickBooks or on your calendar to ensure you submit your payment on time.
• Review Your Tax Liability Regularly 
• Regularly review your income and expenses to adjust your estimated tax payments if necessary. This helps avoid underpayment penalties.
• Consult with a Tax Professional 
• If you’re unsure about your calculations or have had significant changes in income, consider consulting a tax professional.

Conclusion

Tax season can be overwhelming, but you don’t have to navigate it alone. I offer a complimentary 20-minute consultation for new clients where we can discuss your specific tax situation, review your income and expenses, and ensure you’re on track to meet the September 16th deadline. 

If you find QuickBooks Online challenging or if your financial situation is complex, I’m here to help. As a QuickBooks ProAdvisor, I can provide tailored advice and assist you in setting up your account correctly, so you can manage your finances with confidence.

Schedule your consultation today and let’s make sure your third-quarter taxes are in perfect order!