10.09.07
Should I File Quarterly Estimated Taxes?
As a small business owner, it is sometimes difficult to determine if you should be filing quarterly estimated taxes. The answer is “it depends”. Much will depend on your family’s total tax position. Yes, I said family. For most sole proprietors, its not just about your business income, but all income.
If you have enough earnings from your business, you may have to make quarterly estimated tax payments. However, if your family has enough withholding from other jobs to cover your tax liability, then you may not have to make quarterly payments.
Your estimated taxes should reflect your family’s total expected tax liability. That tax liability will depend on:
- amount of family income
- itemized deductions
- number of children
- amount of business expenses
For more information on this subject, read IRS Publication 505, Tax Withholding and Estimated Tax available at the IRS website.
