Is It Necessary To File Quarterly Taxes?

[wdmmom]

For the past 3 years that I've been in business, I haven't opted to file quarterly taxes. I just wait until I file my taxes and have my the amount I owe taken out of my refund. Is it ok to go this route?

Lately I've considered paying into quarterly taxes, however, is there a way to "pay what you want" rather than going by the standard 20%. I think 20% would be a lot for me to pay in considering I still get a substancial return each year. What if I mailed in $100 a month? Perhaps nothing would be taken out of my refund next year. Is this a possibility?

Thanks Tom!

[MyAngels]

I'm not entirely sure I'm understanding what you're saying - having a brain dead day I think - but if you get a refund at the end of the year, you don't need to pay any quarterly taxes.

[wdmmom]

Originally Posted by MyAngels

I'm not entirely sure I'm understanding what you're saying - having a brain dead day I think - but if you get a refund at the end of the year, you don't need to pay any quarterly taxes.

If I pay my portion in taxes every quarter rather than having them taken out of my refund, my refund will be greater which is what I would rather go for. Especially given in another 2 years, my daughter will be 18 and I will lose the ability to claim her.

Between that and if for some reason the way we file, make more money, don't get EIC, than I'd much rather be ahead than have to pay in.

[Lyss]

I'm wondering about doing it quarterly too. I don't really know how though, any advice for a newbie?

I'm married and usually my husband gets a substantial amount back from the federal government and a little from the state (OR) but I don't really want to tap into that to pay my taxes as that is what we put into any medical debt that we accrue during the year. I'd rather pay as i go.

[MyAngels]

Originally Posted by wdmmom

If I pay my portion in taxes every quarter rather than having them taken out of my refund, my refund will be greater which is what I would rather go for. Especially given in another 2 years, my daughter will be 18 and I will lose the ability to claim her.

Between that and if for some reason the way we file, make more money, don't get EIC, than I'd much rather be ahead than have to pay in.

If that's the case, then I would set aside the money in some sort of short term savings or investment to have when it comes tax time. I know they are not paying but a pittance in interest right now, but that's better than having Uncle Sam hold it for you, since he doesn't pay interest. That way you'd be covered if for some reason you need to pay at the end of the year, and if not then you'd have that money as a "refund" anyway. JMO, and I'm sure Tom will chime in with the best advice .

[TomCopeland]

Originally Posted by wdmmom

If I pay my portion in taxes every quarter rather than having them taken out of my refund, my refund will be greater which is what I would rather go for. Especially given in another 2 years, my daughter will be 18 and I will lose the ability to claim her.

Between that and if for some reason the way we file, make more money, don't get EIC, than I'd much rather be ahead than have to pay in.

No. Don't increase your refund by paying quarterly estimated taxes. If you owe less than 90% of your taxes each quarter you don't need to file estimated taxes. If you get a refund, you don't need to file estimated taxes. Set aside the money you thought about paying in quarterly and put it in a CD or money market account.

However, if in the middle of the year you realize that you are making more money and might owe some taxes, then file the next quarterly estimated tax form. The deadline for these forms are: April 17th, June 15th, September 15th and January 15th.

[wdmmom]

Thanks Tom!!