2nd Quarter Estimated Taxes: Due on Fri 06-15-2012!

Title: 2nd Quarter 2012 Estimated Taxes are Due!
Description: Estimated tax payment. Your second-quarter estimated tax payment for Tax year 2012 is due. Mail form 1040-ES with your payment or pay online.
Date: 2011-06-15

Link: www.irs.gov/pub/irs-pdf/f1040es.pdf

Quarterly Estimated Tax payments can be tricky but it’s not rocket science. You have an option to pay in 100% of your prior year’s tax liability or 90% of your current year’s liability, which is then divided into four quarterly estimated tax payments due each year in April, June, October, and in January of the following year.

If you pay too little, you will be penalized. If you pay too much, you are wasting money that could be invested, used to pay down debt, or used for other tax benefits, like retirement/IRA contributions. (Or it could just be a little more cash in your pocket!)

If you are earning less this year compared to the previous year, you may very well owe less tax too — in this case, you may opt to base your estimated tax payments on 90% of your current income. You do need to be accurate in this calculation. Having your bookkeeping current & balance sheet accounts reconciled at the end of each quarter is the most accurate way to do tax planning — a set of accurate financial statements is the best way to avoiding an over-payment or under-payment on your estimated tax. Having the assistance of a good tax professional is also very important.

If you need help with getting your books in shape for the first half of the year, please call me & let’s get it done. I can show you the fastest way to keep your books updated by downloading transactions into QuickBooks directly from your bank & credit card companies. This will insure these accounts are mirrored perfectly on your QuickBooks financial statements. In my experience as a QuickBooks Professional Advisor for the past 15 years, I have noticed that most people  do not know how to record their credit card charges and this leads to missed deductions or overstated expenses — both situations can be easily avoided by downloading your bank/credit card accounts directly to QuickBooks, which records every item on the accounts without fail. You need to reconcile these accounts quarterly (at the minimum) too. I can recommend an excellent CPA if you need help in the tax department. or I will be honored to work with your tax person.

If all of this sounds like a bunch of mumbo-jumbo, I highly recommend hiring me for a session to help you get a better understanding of your bookkeeping. You don’t need to know everything about accounting  — but you should be aware of how your own accounting works.

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Thanks 🙂

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