Preparing Quarterly Tax Payments for Your New Colorado Small Business
If you are a relatively new Colorado small business, and the January deadline to pay estimated taxes just snuck up on you, this post is for you.
You or your bookkeeper are probably using software to keep track of your sales and income – but knowing what you brought in is not the same as knowing what you owe in taxes. Plus, for small business owners, paying taxes is not an affair you sweat out every year in April – your estimated taxes are due four times every year, so you want the process of estimating what you owe, plus having the funds on hand to meet your obligations to be as simple as possible. Tax planning is always an important part of your overall business plan for the coming year, so take some time now, before the year gets away from you, to make sure you are ready for what lies ahead.
Making Your Small Business Estimated Tax Payments
If you already have a year of business ownership in your rear view mirror, then the process of making your small business estimated tax payments can be a bit more simple for you, but you can still get caught owing much more than you thought you did when the final calculations are made in April of next year. What’s the best way to stay on top of what you will owe? If you have ever had trouble meeting your tax obligations, or failed to run certain calculations correctly, you already know this: hire a qualified tax professional to help you stay on top of what you will owe. Estimated taxes are actually designed to keep you out of trouble, so having someone help you make those estimations correctly is a smart thing for any small business owner to do. Plus, you can write of the expense of having help!
If on the other hand, your small business has only been around for a couple of months, trying to figure out what taxes you might owe on this year’s income based on last year’s income is going to be difficult. It’s true that owing less than $1000 in taxes at the end of the year will mean that you don’t need to file quarterly taxes, but what if you do so well that your start up expenses and other allowed expenses during the course of the year don’t reduce your taxable income as much as you expect?
Try Calculating Estimated Payments Yourself
Here’s a litmus test for you: try calculating estimated payments yourself. If you can do it, put them on your calendar each quarter, and do them yourself (but consider having a tax professional review and submit them for you). If they are confusing, or just take more time than you have to give, use the list of questions provided at the end of this blog to find and hire someone to help you. Here are the relevant forms:
Questions to Ask a Prospective Tax Preparer
When you hire a tax professional for your small business, take the time to find someone who is qualified – the IRS offers the following list of questions to ask prospective tax preparer.
- Has the preparer worked with businesses similar to yours in size and type?
- Is the preparer familiar with your particular line of business?
- Does the tax preparer offer electronic filing?
- [Will he or she] deposit your tax payments electronically?
- [Ask] what services are included in the preparers’ fees.
- If the IRS examines your return, what is their policy on assisting you?
- You may want to ask for references, just as you would for any professional service.
- Consider checking with the Better Business Bureau, your State Board of Accountancy for CPAs, the State Bar Association for attorneys, or the IRS Office of Professional Responsibility for enrolled agents.
- Avoid any paid preparer who refuses to sign a return they prepared.
If you need a highly qualified tax advisor, or just want a referral to a good tax accountant to help you calculate quarterly tax payments for your new Colorado small business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: firstname.lastname@example.org
Contact Us Today
Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
3773 Cherry Creek North Drive, Suite 575
Denver, CO 80209
Sign Up For Our Email Newsletter
Privacy by SafeSubscribeSM