Business tax questions.

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Webwonder

Webwonder

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Mar 12, 2008
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I spoke with a CPA yesterday about setting up a LLC, taxes and everything.

The one thing that really bothers me is this. He wants me to pay 30% of my profit quarterly in taxes. Does that sound normal? That's a huge ass chunk of change.

He also says that if I wait to pay the taxes at the end of the year (instead of quarterly) that I'll be penalized. Is this true?

I'm going to talk to another CPA in a couple days but I wanted to get some input from some of you on this.
 


LOL. 30% quarterly? What a load of bullshit. Paying yearly is much better/preferable -- why the fuck would you pay quarterly when your income fluctuates and you can end up overpaying? Not only that, but the money could be used to INVEST. That guy is a complete joke.
 
Those are the same rules I follow and if you owe over a certain amount at the end of the year, and didnt pay in quarterly, you can be penalized pretty heavily. Yes, you can keep the money and invest it, and that is the IRS's reasoning behind wanting it sooner than yearly.

I think your accountant is speaking truthfully.
 
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My understanding is that the penalty is equivalent to nondeductible interest on the amount you underpaid, for the period of the underpayment, usually calculated per day.

NOTE - I have never been late nor am I an accountant so take it with a grain of salt.
 
I asked my accountant last month the question of quarterly payments.

His response was that the only time that YES they want you to pay quarterly however as u are always able to make your tax payment on the 15th (not using the payment options) then they won't require you to do the quarterly payments.

I set aside 20% of my normal income. This is because I know Ill be able to write off at LEAST 15% of the roughly 30% that Ill need to pay.

Ill use the same disclaimer that I am not an accountant nor the IRS... SO yeah, my 2cents.
 
SuperMetroid said:
LOL. 30% quarterly? What a load of bullshit. Paying yearly is much better/preferable -- why the fuck would you pay quarterly when your income fluctuates and you can end up overpaying? Not only that, but the money could be used to INVEST. That guy is a complete joke.
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If you don't want to get penalized and pay even more you will want to pay quarterly.

How the fuck is paying 30% quarterly going to matter if your income fluctuates?

I suggest you hold back on giving out tax advice.
 
Yes, you have to make quarterly estimated payments. The IRS bases what they think you should have paid off your previous years income. The IRS wants you to pay at least 90% of what you will owe.
If you make under 150k the IRS will give you some room, over 150k I would pay the 30%.

There have been times when I elected to not pay the quarterly and invest the money.
I can't remember what the penalty was, but I don't think it was significant.
 
There are calculators online you can use to find out exactly how much to send. The penalties are minor, but the pain of paying a huge lump at the end of the year is unbearable. Pay as you go.
 
Hello friend,

If commit fraud of tax then no have pay all.

I hear the rich in America do by hire expert who make secret account in country of another where government no can see money.

Good luck bro
 
Webwonder said:
I spoke with a CPA yesterday about setting up a LLC, taxes and everything.

The one thing that really bothers me is this. He wants me to pay 30% of my profit quarterly in taxes. Does that sound normal? That's a huge ass chunk of change.

He also says that if I wait to pay the taxes at the end of the year (instead of quarterly) that I'll be penalized. Is this true?

I'm going to talk to another CPA in a couple days but I wanted to get some input from some of you on this.
Click to expand...


You have been told the truth, that is not BS contrary to what some others might think. In addition to having a fulltime job (W2), I also run a janitorial company and we (wife & I) pay in quarterly taxes so as to not get penalized at the end of the year. Your CPA is leading/guiding you correctly.
 
yellowarrior said:
I asked my accountant last month the question of quarterly payments.

I set aside 20% of my normal income. This is because I know Ill be able to write off at LEAST 15% of the roughly 30% that Ill need to pay.

Ill use the same disclaimer that I am not an accountant nor the IRS... SO yeah, my 2cents.
Click to expand...

We do similar with our business....b/c I have a physical (non-internet) business, I find more to legally write off.
 
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