What Are Estimated Taxes and How Do They Work?

If you’re a business owner, you’ve probably heard about estimated taxes, but you may not fully understand how they work. Simply put, estimated taxes are the way the IRS collects taxes on income that isn’t subject to regular withholding, like self-employment income, interest, dividends, or rental income.

If your business is making a profit, you’ll need to pay estimated taxes four times a year. But figuring out how much to pay can be tricky—overestimate, and you’re giving the IRS too much of your cash; underestimate, and you could end up with a hefty tax bill and penalties.

At MIG, LLC, we’ve been helping businesses calculate and pay estimated taxes for years. We start by analyzing your income, expenses, and any changes in your business throughout the year to come up with the right amount to pay each quarter. This not only helps you stay compliant with the IRS but also keeps more money in your business throughout the year.

We’ll make sure you don’t overpay, and we’ll help you avoid the stress of underpaying and facing penalties. And if your income fluctuates, we’ll adjust your estimated payments accordingly, so you’re always paying the right amount.

If you’re unsure about how much to pay or when your payments are due, reach out to MIG, LLC. We’ll take the guesswork out of estimated taxes, so you can focus on growing your business.