Is Paying Estimated Taxes Actually a Good Idea?
Is Paying Estimated Taxes Actually a Good Idea?
For most people, thinking about taxes outside of April is a sin. However, anyone who earns self-employment income must think about taxes all the time. That’s especially true every three months when it’s time to pay quarterly estimated taxes.
No one really likes paying estimated taxes. After all, who wants to give away large chunks of money all at once four different times during the year? Nobody! But when you don’t fill out a W-4 and the IRS doesn’t automatically take its cut from a payroll check, you typically have to pay these taxes.
Despite the unpleasant feeling you get when you lay that money down and ship if off to the IRS, there are some reasons paying your quarterly estimated taxes is actually a good thing.
Imagine the feeling you would get if you were expecting a large refund at tax time, only to find out you didn’t pay enough and you actually owe a significant amount. By paying your estimated taxes you save yourself the shock of a surprise tax bill.
Furthermore, you might even owe additional fees and penalties if the bill is too high. In fact, if you owe more than just $1,000 the IRS could tack on penalties. That’s not a surprise anyone wants.
Lastly, when you pay quarterly estimated taxes you also get a better idea of your income. When you make these payments you tend to watch your cash flow more closely, which helps you keep a budget. That’s a good idea for everyone.
Even though making quarterly estimated tax payments sounds unpleasant, the reality is it might not be such a bad idea after all.
We hope you found this article about “Is Paying Estimated Taxes Actually a Good Idea?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Business Angels for Your Startup Business
Business Angels for Your Startup Business By Mike Cain Setting up a new business can be a daunting prospect. There’s the possibility of failure, and with it, the risk of losing the money you’ve invested in your company, as well as seeing all your months or even years of hard work go to waste. But,…
Securing Second- and Third-Round Venture Capital Financing
Securing Second- and Third-Round Venture Capital Financing By Jim D. Ray Widget sales are booming – the competition is scrambling, demand is up, and the books are finally treading water. Your core management team has big ideas for the future of Widget Inc. Opportunity is abundant; but how will you fund that next big leap?…
Ten Ways Start-ups Use Venture Leases And Loans To Generate Millions
Ten Ways Start-ups Use Venture Leases And Loans To Generate Millions By George A. Parker The rise of venture leasing and lending has created an opportunity for sophisticated entrepreneurs to gain a competitive advantage. Savvy entrepreneurs are using venture leases and loans to generate millions of dollars for shareholders by leveraging existing venture capital. They…
Avoiding AMT
Avoiding AMT More and more taxpayers are finding a hidden tax on their individual tax returns. The alternative minimum tax (AMT) attempts to ensure that high income individuals who benefit from the tax advantages of certain deductions and exemptions will pay at least a minimum amount of tax. This tax was originally designed to keep…