It’s time to make 2nd quarter estimated tax payments that are due June 15. Did you make a 1st quarter estimated tax payment in April? Did you pay in a safe harbor estimate provided by your accountant last tax season? Your answer will dictate your next step.
Safe harbor tax estimates are based on prior year tax liabilities, so if your business or income is different this year, you may owe more or less than you did last year. If you determine that you have overpaid, decrease the next estimate and keep some of that money in your pocket. If you have underpaid, use two quarters to catch up, lessening the cash flow burden.
Here is the estimate schedule for the entire year:
Payment Period ————————- Due Date
January 1 – March 31 ——————— April 18
April 1 – May 31 ————————- June 15
June 1 – August 31 ———————- September 15
September 1 – December 31 ————- January 15
Hopefully, with this easy and proactive approach, paying in some tax now will leave enough cash available to fund your business or fund your personal pocketbook. Now, cash flow becomes manageable and isn’t such a heavy burden. The important thing to remember is that having choices is a good thing. No one likes to pay taxes, but it is a much easier pill to swallow when you don’t have to pay the entire bill with one check.