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Quarterly Taxes

Simplify quarterly taxes with Wasserman CPA. Expert guidance for freelancers, business owners, and investors to ensure accurate, timely payments.


Quarterly Taxes

Concerns regarding quarterly taxes can arise for business owners or individuals with multiple sources of income, this an essential part of the tax landscape for people with income that’s not withheld, such as freelance income, rent income, dividends, or even some pension distributions. In short, if the money is earned outside of a regular paycheck, quarterly taxes are inevitable. 

In line with that, if you need help with your quarterly taxes, Wasserman CPA is the answer. We have over 30 years of experience ensuring accurate estimated tax payments are filed on time for clients across New Jersey.


Quarterly Tax Obligations

Self-employed people aren’t the only ones who owe quarterly taxes. Below is a list of some classes of taxpayers:

  • Freelancers and Contractors: People who provide professional services without traditional employment or people who work independently will need to make estimated quarterly tax payments.
  • Small Business Owners: Just like freelancers and contractors, small business owners who make profit during the year should also make quarterly tax payments.
  • Owners of Rental Property: You may owe quarterly payments if you own rental property and collect regular short- or long-term rental income. You can read more about taxation of rental properties (here).
  • Investors: Large capital gains or dividend income can also cause investors to pay estimated taxes quarterly.

The goal of quarterly tax payments is to avoid a huge liability at the end of the year while also allowing taxpayers to pay taxes on their income over time as they earn it.


Quarterly Tax Calculation

The calculation of quarterly taxes is based on a couple of key factors:

  • Projected Income: The total income from all sources including freelance, rent, investment or any other income during the year is projected.
  • Tax Deductions and Credits: Includes deductions and credits that would reduce estimated tax payments.
  • Expected Tax Rate: This is the marginal tax rate applied to determine how much of estimated income should be paid in taxes. But, most taxpayers take last year’s tax return as a reference.

Form 1040-ES comes with worksheets and instructions that guide people in estimating how much they should pay.


5 Practical Tips for Handling Quarterly Taxes

The concept sounds simple. But there are some challenges that people encounter with estimated tax payments. In light of these challenges, we frequently provide our clients the following practical advice:

  • Pay your taxes periodically: As a general guideline, you can save between 25-30% of each payment for taxes. That way, when you hit your quarterly due date, you will be ready!
  • Have a Separate Account: A separate savings account for tax purposes would stop you from spending the funds you must be setting aside for your taxes.
  • Monitor Receivables and Payables: Knowing exactly how much you will be receiving and owed makes tax estimating easier because all of your sources of income and deductible expenses are recorded all year round.
  • Automation in Your Savings: Most banks offer the ability to set up auto transfers to your savings account for tax preparation. This would help you build the estimated tax reserves with zero effort.

Our Offerings

With our 30 years of experience, we have assisted many individuals for countless quarters, we also ensure that our services are quality for long-term collaborations. Here are an overview of our offerings:

  • Accurate Calculation: We ensure that you never File Short or Go Over Wasserman CPA reviews financial information from the current and previous years in great detail to ensure the most accurate calculations.
  • Personalized Guidance: Every tax situation is unique. We offer coaching that is specific to your streams of income.
  • Deadline Reminders: Opting out at the last minute can lead to penalties. We record all due dates for any given client. And just before every quarterly tax payment, you receive reminders.
  • Tax Planning Advice: Quarterly taxes aren’t just about remitting what you owe—we see them as a time to strategize to lower the total tax liability for the year.

Key Quarterly Tax Deadlines

  • April 15: Payment for the first quarter is due
  • June 15: The second-quarter payment is due.
  • Sept. 15: Third-quarter payment due
  • January 15 (succeeding year): Fourth-quarter payment due

Contact Us Today

Calculating all the income from different resources by considering potential credits and deductions as well as the due dates can easily add extra working days, efforts and research processes for taxpayers. Wasserman CPA can make this easy and hassle free for you, we are committed to making quarterly tax compliance so easy and convenient that you can spend that time actually doing something productive for your business.

Get in touch for a consultation and let us handle your tax journey.


Frequently Asked Questions

  • What if I fail to make quarterly tax payment?
  • Is there any way to change my estimated tax payments throughout the year?
  • But what if my earnings are volatile?
What if I fail to make quarterly tax payment?

So if you miss a quarterly tax payment, expect the IRS to hit you with a penalty for underpayment. The dollar amount of the penalty depends on how much you owe and how late you pay. To avoid penalties, pay the new amount as soon as you can, or consult a CPA for assistance.

Is there any way to change my estimated tax payments throughout the year?

Yes, you are allowed to lower your estimated tax payments as your income changes. If your new income is higher or lower — and likely will stay that way — adjust your payments to keep pace. This can let you dodge overpaying or underpaying.

But what if my earnings are volatile?

If your income does vary dramatically, you can continue to make estimated payments according to whatever you think makes the most sense. You might also employ the annualized income installment method, which lets you pay taxes based on how much you earn in each quarter instead of one-fourth of the way through the year.

OUR CLIENTS

CLIENTS THAT TRUST OUR SERVICES


Marc has been both my business and personal accountant for several years. During this time I have had a number of small businesses and bought and sold real estate. I know that I can rely on Marc to do the best possible job for me in any financial situation.


JEAN WILCOX



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