Questions

I'm trying to understand when a startup needs to start worrying about tax payments (assuming they are profitable). I'm talking about federal taxes specifically. Is it quarterly? Annually? Year end?

The IRS wants quarterly estimated tax payments based on an estimate of what the business will make that year. They want you to pay 100% of the previous year's tax over the course of 4 quarters or 90% of the current year's estimated income.

However, since this is their first year in business and they've only been operational for a few months it's possible to have your "under payment penalty" waived since it's their first year.

Their tax professional should be able to apply the waiver.

Best


Answered 3 years ago

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