I started my consulting business in Q4 and made a profit. However, I also had
a W-2 income in Q2 and Q3 for which significant taxes were already withheld.
I know that I will be receiving a refund over the full year. Do I still need
to pay estimated taxes in Q4 (prior to Jan 15 2013) because I became a Sole
Prop with income in Q4? I think not, but just wanted to make sure. Also, my
refund is estimATED but haven;t filed yet because my w-2 form is not received
in time before Jan 15...
No, you do not need to pay estimated taxes if you will not owe taxes for the
year. The IRS requires that 90% of your anticipated tax liability must be
prepaid, either through withholdings or as estimated tax. Because you
anticipate receiving a refund, no matter how small, you do not need to pay
estimated taxes. However, you may need to pay them in the future.
kmurray | Community Moderator |
1/11/2013 - 6:24 pm
Hi, Consulting a tax professional with these specific questions would be a great option. The SBA also has resource partners like SCORE, Women’s Business Centers and Small Business Development Centers located across the country, which provide free business counseling to individuals looking to start or expand a small business. These organizations can help you with the process of starting your business. Visit our local assistance guideto find your local SBA resource partners by entering your zip code.
BizResearcher | Window Shopper | 1/15/2013 - 12:22 pm
year. The IRS requires that 90% of your anticipated tax liability must be
prepaid, either through withholdings or as estimated tax. Because you
anticipate receiving a refund, no matter how small, you do not need to pay
estimated taxes. However, you may need to pay them in the future.
kmurray | Community Moderator | 1/11/2013 - 6:24 pm
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