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Small business owners — have you filed your taxes? Well, don’t get too comfortable just yet. I’m here to tell you about quarterly tax payments.
I’ll let you in on something that’s probably not so secret… The American IRS tax system is on a pay-as-you-earn system. This means you need to pay most of your taxes during the year, as you receive income, rather than paying at the end of the year.
This is especially true for my small business owners who are contractors or freelancers. Basically, if you filled out a W9 form, then this is a key indicator that you may need to be paying quarterly taxes on the income you earn throughout the year. This means instead of having one tax day — which is usually April 15th — you’ll have four “tax days” in a year.
Keeping track of their due dates is crucial to avoiding pay penalties and interest. These dates are April 15th, June 15th, September 15th, and January 15th. Make sure you flip through your completed tax returns to see if there are vouchers to support the quarterly tax payment amount.
As I shared before, a tax professional is someone you definitely need on your team as a small business owner. Don’t leave taxes to chance. You don’t want to get on Uncle Sam’s bad side.
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Rianka R. Dorsainvil, CFP®️ is the Co-Founder and Co-CEO of 2050 Wealth Partners a virtual, fee-only comprehensive financial planning firm dedicated to serving first-generation wealth-builders, entrepreneurs, and thriving professionals. Rianka also hosts 2050 TrailBlazers, a podcast aimed to address the lack of diversity in the financial planning profession by engaging industry experts and leaders in conversation.
As an award winning successful, millennial Certified Financial Planner professional, Rianka offers a unique perspective not only on the current state of the financial service industry, but on how to stay relevant in an ever-changing world.
Rianka serves as a member of CNBC’s Digital Financial Advisor Council and CFP Board’s Diversity Advisory Group, is a Forbes Personal Finance Contributor, and has been recognized for her accomplishments and leadership within the industry by leading publications and organizations such as Investment News’ inaugural 2017 Women to Watch Rising Star and Wealth Management’s Ten to Watch in 2018. She has been published in PBS NewsHour, Forbes, USA Today, Black Enterprise, CNBC, Women’s Health, and more.