Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
When you run your own shop or are self-employed, there’s so much paperwork you barely have time to run the business! Unfortunately, estimated tax payments (ES payments) are one more administrative burden and financial responsibility for you to shoulder.
Here are some questions my clients frequently ask me about making estimated tax payments.
Who must make estimated tax payments?
If you’re self-employed and making a profit, you must set aside approximately a third of your profits to put toward IRS and self-employment taxes. Plus, if you live in one of the states with an income tax (find out if you live in a state without a state income tax), set aside an additional 5 to10 percent to cover state taxes.
Wow! That hurts. You’re going to have to pay it sooner or later; you may as well build the taxes into your routine budget.
When are estimated tax payments due?
Estimated tax payments are due quarterly. That doesn’t mean every three months. The IRS lives on a different schedule from the rest of humanity. Your estimated tax payments must be postmarked by:
When the 15th lands on a weekend or holiday, the payments are due on the next business day.
How can I pay my estimated taxes?
There are three ways to make estimated tax payments:
Can I avoid estimated tax payments?
You betcha! Here are three easy ways to avoid estimated tax payments but still cover your taxes owed to the IRS:
You’ll find more details in chapter 2 of IRS Publication 505.
What if I don’t make estimated tax payments but pay my taxes by April 15?
The IRS charges an underpayment penalty of approximately 4 percent per year. That’s less than credit card interest. Even if you draw money for the payments from a zero percent credit card, there’s a 3 percent cash advance fee. This is actually pretty cheap money.
But if you can’t cover the taxes by April 15, the stakes go up. So don’t gamble.
Have you run into any roadblocks with estimated tax payments?
Eva Rosenberg, EA is the publisher of TaxMama.com, where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.