WorkingPoint's Estimated Tax Report estimates your federal income and self-employment taxes based on IRS tax schedules for the current year, so you know how much you need to save for end of year taxes or for estimating your taxes for quarterly tax payments.
If you are a new business, you may not need to pay estimated quarterly taxes your first year of business. But you can use this report to see how much you may owe when April 15th rolls around. WorkingPoint will take your profit for the current year and apply the tax table for your filing status to come up with an estimate of your federal income and self-employment taxes. Save the estimated amount and you'll be ready to cut that check to the Feds come tax time, if necessary.
If you've been in business for more than a year and paid additional taxes when filing your Form 1040 to the IRS last year, you’re likely required to pay estimated quarterly income taxes for this year. This means that 4 times a year you pay an estimated amount to the IRS to cover your taxes for the year in advance of your annual filing. You can also choose to pay the estimate for the entire year if you pay it all by April 15. While this can seem like a drag to pay taxes "up front", it can actually be a help because as sole proprietors, we often forget to plan for our income taxes and then we find out too late that we owe a ton of money in taxes and we don't have it.
You can use the Estimated Tax Report to estimate your taxes for the year based on a profit amount you provide (such as from last year's tax return) or based on business activity you've recorded to-date in WorkingPoint.
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Note: This report only estimates taxes and is intended to be used as a guide for cash flow planning only. The IRS Estimated Tax worksheet includes other deductions and calculations not included here. For Form 1040-ES and additional instructions on whether you are required to pay estimated quarterly taxes and how to calculate them, go to http://www.irs.gov/pub/irs-pdf/f1040es.pdf |
