The federal government requires businesses throughout the United States to pay taxes. For most businesses, that means paying taxes four times a year. Those estimated payments are called quarterly taxes. If you’re an executive based in Chicago, you must submit your quarterly taxes on time because they can't be extended.

When you understand when taxes are due, you can manage your tax liabilities better. That means you allocate resources when necessary to ensure you comply with the Internal Revenue Service (IRS) regulations and figure out advantageous ways to save more of your profits.

This comprehensive guide will answer all the questions you have about getting your quarterly taxes paid on time when you’re based in Chicago. What’s the due date? What should I pay? How do I file? It’s all covered below.

When are Quarterly Taxes Due?

Your quarterly tax payments are due April 15, June 15, September 15, and January 15. Typically, quarterly taxes are due three months after the first day of the quarter in which you’ve earned the income.

The majority of businesses elect to make their tax payments on the 15th of the month. For 2020, due to the Covid-19 pandemic, the IRS moved the April 15 filing date to July 15. For 2021, the IRS moved the April 15 filing date to April 30.

Why Do I Need to Make Quarterly Tax Payments?

Quarterly taxes are required for businesses and individuals with substantial or large incomes. This is because the IRS wants to secure payment for taxes in a shorter timeframe than the yearly cycle.

The government anticipates that individuals with higher incomes will have taxable chunks of income taken out of their paychecks throughout the year. When the government tax code states that your final tax obligation may exceed what you’ve paid throughout the year, you must pay the balance when estimated taxes are due to ensure there are no late penalties.

Even if you owe nothing when indemnifying your taxes annually, the IRS still encourages you to pay quarterly taxes. That way you avoid having a hefty tax liability when the year ends and the government has yet to receive the required payment.

What Do I Need to Pay?

If you’re an executive based in Chicago, you need to pay four quarterly taxes. These taxes include the Federal Project Account taxes, State Taxation Authority taxes, Corporate taxes, and Social Security and Medicare taxes.

The Federal Project Account taxes are taxes you pay on all of your income. State Taxation Authority taxes are taxes paid based on the specific rules allocated to individuals by the state in which you earn income. Corporate taxes are taxes paid based on the income made from your business. And Social Security and Medicare taxes are taxes paid by businesses and individuals, at a 6-17% rate, and collected from wages and self-employment income.

How Do I File?

Filing your quarterly taxes is a straightforward procedure. First, you need to examine your total gross income, tax withholding credits, and deductions to determine if you’ll need to make any estimated payments.

When filing estimated payments, you must document incomes, business profits and losses, and deductions on IRS 1040-ES forms and submit them with your payments.

For businesses, you need to furnish information regarding business deductions and information regarding any capital gains on a Schedule C form for small businesses, Schedule ESE for large businesses, and Schedule D for capital gains and losses.

Finally, submit the information to the IRS in good time and make your payments.

Closing ideas

Quarterly taxes help individuals better manage their tax liabilities. Most likely, you need to submit payments on April 15, June 15, September 15, and January 15. You must pay the Federal Project Account taxes, State Taxation Authority taxes, Corporate taxes, and Social Security and Medicare taxes.

For filing your taxes, make a copy of all documents, submit IRS 1040-ES forms, and furnish Schedule C, Schedule ESE, and Schedule D forms. Then, make your payments.

For added help, contact the IRS. Of course, you can also seek counsel from experienced lawyers familiar with local regulations available from UpCounsel.

Topics:

Quarterly Taxes,

Due Date,

Chicago