When are Q2 taxes due? If you’re asking Google, then your business needs a CPA. Until then, I can help. Today, I’ll guide you through the process of paying quarterly taxes so that you meet your obligations while keeping an eye on the future.
Let’s start with the basics. Here’s when quarterly tax payments are due this year:
- 1st quarter — April 18, 2023
- 2nd quarter — June 15, 2023
- 3rd quarter — September 15, 2023
- 4th quarter — January 16, 2024
Most business owners don’t have the Q2 due date hardwired into their brains, so for the sake of memory: quarter two taxes are due June 15, 2023.
Now that that’s settled, let’s get into the details of estimated quarterly payments.
Most small businesses must pay quarterly taxes
You’ll need to pay if you expect to owe $1,000 or more in taxes when your return is filed, and you’re a
- sole proprietor;
- member or manager of an LLC; or an
- S corporation shareholder.
You also have to make estimated payments if you’re a corporation and expect to owe $500 or more when you file. The rules and scheduling are fairly simple for quarterly payments, and the truth is, they encourage businesses to stay organized on taxes.
Now’s a great time to review the last six months
Your business should be engaging in year-round tax planning. It helps you make smarter business decisions and minimize your tax obligation.
Quarterly tax payments force you to maintain accurate projections, which keeps you on your toes, fiscally. You’ll avoid pitfalls before they become major issues and be better prepared to qualify for tax credits and deductions.
As you prepare to file, look back at the goals you set at the beginning of the year. Maybe you’re not meeting all of them: Now is the time to make adjustments.
Use the opportunity to meet with your CPA
If this is your first year with a small business, you might be surprised by how complicated quarterly taxes are.
You should be meeting with your CPA every quarter, anyway. If you haven’t met with them yet in 2023, schedule a meeting ASAP.
Calculate your tax liability
Use these four steps to determine your Q2 liability.
- Calculate your total expected income and factor in deductions. That’s your adjusted gross income (AGI).
- Multiply your AGI by the appropriate tax rate for your estimated income tax liability.
- Combine your estimated income tax liability and your estimated self-employment taxes to find your estimated annual tax obligation.
- Divide your estimated annual tax obligation by four. That’s your quarterly tax amount.
If you try to go it alone, you’ll likely miss deductions that come with the numerous and frequent changes in tax law. That’s why it’s best to consult your CPA for accurate calculations.
Choose a payment method
Once you know what you owe, it’s time to decide on the payment method.
- Electronic Federal Tax Payment System (EFTPS): EFTPS is a secure online system provided by the IRS. It allows you to schedule payments in advance, ensuring timely submission. You can set up an account on the EFTPS website.
- IRS Direct Pay: IRS Direct Pay is another online payment option that allows you to pay your taxes directly from your bank account. It’s faster and a better choice if you have an immediate deadline and haven’t signed up for EFTPS.
Set a payment schedule
Remember, Quarter 2 taxes are due on June 15th. If you opt for the EFTPS, schedule your payment for this date.
Make sure you have enough cash on hand to pay Q2 taxes
Plan ahead to ensure you have the necessary funds in your bank account. If you don’t have enough cash on hand, you’ll face a penalty from the IRS.
Let’s work together on your Q2 taxes
I’ll help you with more than just compliance. My team brings enterprise-level tax, accounting, and financial processes to small business owners, and it works.
Schedule a discovery call with us today.
Jeremy A. Johnson, CPA