The WHY behind EQ$
The IRS is a Pay-as-You-Go tax system. We're required to send in 4 estimated payments throughout the year ... then, it's True Up time when we actually file our taxes. If we overpaid, we'll get a refund. If we underpaid, we'll owe more.
Good news!
Once you know what you’re doing … it only takes about 5 minutes!
It can feel really satisfying, like you’re a BOSS of your business.
It makes Filing Taxes in April a lot nicer.
A Few Quick Facts about Sending in EQ$
When you send in an EQ$, there is no report attached. (We are NOT filing.) If sending by check, there’s just a small voucher. If online, just a few fields to fill out to verify your identity.
You can send payments online, or via snail mail. Click here to read more.
IMPORTANT - if sending payments online, see note below.
It's fine to use your SSN with these payments. (Even if you have an EIN.)
The Due Dates are not even! (Weird, right?)
DUE Dates
April 15
June 15
September 15
January 15
Note - When these dates fall on the weekend or holiday, they will shift to the following business day.
To Send in or Not Send In….
If total tax for the year (related to your biz profit) is $2000 or less, then the IRS says that we do NOT need to send in payments.
If total tax for the year (related to your biz profit) is $2000 or more ... we're required to send in payments.
If we send in partial payments, or none at all, we might have to pay a penalty. Usually these are a few hundred dollars or less.
How Much to Send
The IRS offers a complex way to calculate your EQ$. I offer simpler alternatives. Three different methods to choose from. Click here for the NEW worksheet with instructions.
IMPORTANT NOTE / If Paying Online
IF you pay online, and use a 3rd party, be sure to choose "Personal Taxes"
Why? Because your business does NOT pay taxes, you pay personal taxes on the income you earned through your business....
Well those are all the basics on EQ$. It might feel intimidating at first … but it really gets easier over time!