annual or quarterly?

[Adrian 155]

Hi all,

Last year, being my first year in business and showing a small profit I paid my taxes at the end of the year.

This year I show a pretty sizeable growth in income generated.

Last year was pretty easy to pay. This year will be a bit harder to sign the check.

My question: In your opinion what is the best way to handle payments to IRS

annually or quarterly?

My CPA says I should pay quarterly, and I am sure I will start doing it that way. In my opinion it will be easier to pay small quarterly checks than one large check in April. I would however like some feedback on how you do it.

I am not trying to be nosey when it comes to your money, just looking for pro's and con's.

I am still a very small firm and do not want employees (yet). So maybe some of the larger firms can reflect back on when they were small and first started out and how you handled it.

Thanks in advance.:lgtear:

Adrian

[Jeff 232]

Are you a Corp or sole Prop. I pay very little in taxes except payroll taxes, that I pay monthly. I am S Corp and I pay myself payroll and then theres also an amount that you can take from corp and not have to pay all the taxes involved in payroll, I can take money and only pay Social Security, My accountant is very good at helping me reduce tax payments. I pay everything that is required and i dont mind paying taxes, its America and I want to pay my fair share, But a good accountant that knows the service/construction trades can help save you $$$. The more I make yes the more I pay, but dont pay more than you have to. Some accountants just dont know all the tricks of the trade,my 1st accountant had me paying more than I needed and I actually got a credit because he screwed up

Good luck

JL

[Adrian 155]

I am sole, and have never written myself a paycheck. Although that statement may negate itself I just use what I need for basic needs and sock the rest.

[CCPC 26]

My first year as sole prop. I paid one lump summ at the end of the year after that I started paying quarterly. I've been told, but not to sure about this, that you can get away with paying one time at the end of the year, but once you start paying estimated taxs quarterly you must continue to pay that way.

I'm a newly formed S corp this year, and I'm not to fimiliar with this process yet, so I just do what my accountant tells me to do, and write checks when asked.

[John Doherty 126]

I'm pretty sure that once you get to a certain threshold of income there is a penalty for failing to withhold, so quarterly is the way to go.

[Adrian 155]

I think per my cpa's advice then that is what I am going to do then. Thanks for the input everyone. Still trying to grasp the tax ropes. If it were only as simple as just doing the pw work, I wouldn't worry so much. If felt really great to show such an increase in profits, but when she told me the totals and see it on paper aaaahhhhhgggg.

I have a used kidney for sale if anyone is interested, slightly bruised and ulcerated, but it would make a great paperweight for all the tax ppwk. I will even throw in the stones it produces.

thanks for all the input.... this year will be different for sure.

Happy St. Patrick's Day and have a great weekend to all.

Adrian

[PRESSURE PACKED 14]

YOU HAVE TO PAY TAXES :lgsideway

[PressurePros 248]

YOU HAVE TO PAY TAXES :lgsideway

Only when you make a profit :lgmoneyey

[steve r 14]

Hi all,

Last year, being my first year in business and showing a small profit I paid my taxes at the end of the year.

This year I show a pretty sizeable growth in income generated.

Last year was pretty easy to pay. This year will be a bit harder to sign the check.

My question: In your opinion what is the best way to handle payments to IRS

annually or quarterly?

My CPA says I should pay quarterly, and I am sure I will start doing it that way. In my opinion it will be easier to pay small quarterly checks than one large check in April. I would however like some feedback on how you do it.

I am not trying to be nosey when it comes to your money, just looking for pro's and con's.

I am still a very small firm and do not want employees (yet). So maybe some of the larger firms can reflect back on when they were small and first started out and how you handled it.

Thanks in advance.:lgtear:

Adrian

Quarterly is the best way to pay taxes.It wont be so hard in the end .even i pay quartely .i still end up paying in the end

[Adrian 155]

OMG that avatar of Pressure Packed is just not right!!!!

[Mike Stahmer 14]

You are only required to pay yearly as a Sole! Corp and S Corp are required to pay quarterly on the dates that you choose. My best advise would to go buy a few books or go to the library! Invest in some type of accounting software etc! I was an accountant in the Marine Corps for four years before this dance! True also that you only need to pay taxes if you make a profit. As a Sole, it's basically Profit - all expenses = taxable income! Use Turbo Tax Pro Business and you can really take controll of your taxes! I buy all business stuff on my business cards and get statements that make book keeping a synch! Anyway, hope this helps, let me know if you have any other ??

[Adrian 155]

Hey thanks Mike,

Although I value your advice for the tax software. Paying one lump sum is going to be painful to write the larger check this year and could prove disasterous to my checking account. My CPA thinks it would be easier on me to pay quarterly. I honestly respect your past experience as acct. but agree with CPA as the one lump sum can set me back and potentially keep me from purchasing much needed equipment etc.

I did increase my profits this past year but not to the point where I don't have to worry about general living expenses and the like as well keeping my one man op afloat. You said I am only required to pay annually as a sole operator, but does that mean I can't pay quaterly? My Cpa seems to think that is the best course of action to help keep things in check, but. never mention that is not ok to do so.

Again, not shooting down your comments at all as I really do respect them.

I just want to be able to at the very least spread myself thin instead of knocking out the whole acct. with one large payment.

Thanks again to all.

[Mike Stahmer 14]

Quarterly is fine if you wish to go that route! If you are a Solp right now, you should incorporate if you are having large profits. You can nearly cut your tax payents in half or more this way and release liability of your company from yourself. Like I said, there are a ton of good books on this strategy. There is a reason all successfull copanies are corporations! If you set it up, you can represent all the board members yourself and pay yourslef a salary. If you have a business check card or business card, use it for all purchases. Sometimes I think CPA's can do you more harm than good. Remember, they are in business just like you! Anyway, you can streamline everything if you learn more about this side of the business.

[Jim Carroll 14]

are any of you that are S Corps renting your equipment from yourself.

i.e. xyz pressure washing is renting equipment from John Doe.

[Adrian 155]

Thx Mike ,

you have definately sparked some new interest' in this category. The thought of giving myself a salary sounds very good. I always (at this point anyway)

end up scimping on groceries and paying minimums on credit cards just so I make sure I have enough for larger company purchases if needed. It is impossible to do this work without paying and planning on supplies and mechanical issues that "pop" up. I would actually like to open a seperate account for company only and have revenue set aside for just such instances. Great points to think and act on Mike . Once again Thanks a million. I will be looking into incorporating my company to free my personal name up. Great food for thought.

Adrian

[PressurePros 248]

are any of you that are S Corps renting your equipment from yourself.

i.e. xyz pressure washing is renting equipment from John Doe.

I don't do that but I do pay myself back for large capital influx into PP,inc with interest. I wish I could make some money so I wouldn't have to keep loaning the corporation money. Anyone have any tips? I think PressurePros may need the help of KF Enterprises business consulting.