💼Business owners often struggle with paying quarterly estimated taxes.
💰Saving money during times of high uncertainty can provide a sense of security.
❌Not paying estimated taxes may result in penalties, but they are relatively small compared to other consequences.
📈Consider alternative options for investing or securing your savings, such as high-yield savings accounts.
⚖️Assess the specific circumstances and potential risks before deciding whether or not to pay estimated taxes.
What are quarterly estimated taxes?
—Quarterly estimated taxes are advance payments made by self-employed individuals and business owners to estimate the amount of taxes they will owe for the current year.
What happens if I don't pay estimated taxes?
—If you don't pay estimated taxes, you may face penalties and fines from the IRS. However, these penalties are relatively small compared to other consequences.
Can I invest the money I would have paid in estimated taxes?
—While investing that money may seem tempting, it is advised to prioritize saving it in a high-yield savings account, especially considering the short timeline required for paying taxes.
Will not paying estimated taxes affect my existing installment agreement with the IRS?
—Not paying estimated taxes may void your existing installment agreement with the IRS, so it's important to consider this before deciding not to pay.
What factors should I consider before deciding whether or not to pay estimated taxes?
—Before making a decision, assess the level of uncertainty, potential financial emergencies, and your risk tolerance. Consider the pros and cons of paying estimated taxes versus saving the money.
00:01Starting a business can be challenging, especially when it comes to paying taxes.
01:59Quarterly estimated taxes are advance payments made by self-employed individuals and business owners.
03:46Consider the high level of uncertainty during times of crisis and the value of having more cash in your pocket.
04:58Saving the money you would have paid in estimated taxes is recommended, but be cautious not to jeopardize your existing installment agreement with the IRS.
06:36Analyzing the specific circumstances and potential risks is crucial before deciding not to pay estimated taxes.
07:52Consider saving the money in a high-yield savings account as a safety net.
08:40Avoid investing the money in risky options like the stock market, especially considering the short timeline for paying taxes.
09:02Assess your personal situation and make an informed decision based on the pros and cons.
