quarterly tax question about monthly payouts

[clownstep]

You know how with many networks if you don't make enough then you are only paid once a month? Well, how does that work when you're doing your quarterly taxes, since on the last month I would have put money (expense) into my PPC campaigns but, I wouldn't get the profit until a month later.

Would I go into my affiliate accounts and see how much I earned on the last month and count that as profit even though I haven't received the funds yet?

 

[johu]

See a tax professional.
Read http://www.irs.gov/pub/irs-pdf/p505.pdf , as well.


I don't think you're properly understanding estimated taxes. You need to pay (if I'm correct) at least the smaller of these two options per year for estimated tax:

• 90% of total tax due for the current year
• 100% of tax you paid last year

See TurboTax® - Paying Estimated Taxes for Self Employment & Investment Earnings for some more details on estimated tax.


Anyway, if you're working in cash accounting, you only count income when it actually hits your bank account, and expenses when they leave your account. With estimated taxes, you don't pay each quarter, based on the current quarter's income.

 

[clownstep]

Thanks for the links and advice.

I did just do my taxes with a professional and all they did was give me forms for my quarterly taxes and to file them quarterly. I didn't get into details as they said they would charge me extra just to fill out the forms. I wasn't aware that I'm not supposed to pay based on the current quarter's income. I can't afford a personal accountant as I don't make that much. I'll just review your links.

When you say, "100% of tax you paid last year"... is this every quarter? You pay a 100% of taxes you paid the entire year, every quarter? Or the entire year divided into quarter? So if you paid $2000 in taxes last year, how much would you pay this quarter?


Thanks

 

[johu]

If you paid $2000 in tax last year, you would probably end up paying $500 per quarter this year. Calling the IRS might be good enough to answer the questions at hand in general terms - Telephone Assistance . You may have to pay state estimated taxes as well, but I'm really not sure as that probably depends on the state and business structure.