Facebook Instagram Linkedin Youtube
Impact Advisors Group | Duxbury Massachusetts | Warrington Pennsylvania
FREE ASSESSMENT
Have You Paid Your Estimated Taxes?

Business Planning: Have You Paid Your Estimated Taxes?

Author: Brandon Jordan, CFP®, CHFC®, CEPA®, CVGA®, CLU®, MSA, EA | CEO of Impact Advisors Group

As a reminder, business owners and/or independent contractors have unique opportunities as well as unique challenges when it comes to their personal financial planning. The US tax code represents one of those unique opportunities AND challenges!

Historically, many business owners have opted NOT to pay estimated taxes during the year. Business owners often believed that reinvesting those dollars in the business would create more value than the cost of the penalty for late payment. More often than not, they were correct. After all, the penalty was only 3% on the amount of underpayment.

Things are different now as the IRS recently announced that the underpayment penalty will nearly triple… from 3% to 8% (the Federal Short-Term Rate plus 3%). Business owners now have a much more difficult decision to make as deciding to forego making the estimated payments will result in a much higher penalty.

June 17th is the due date for quarterly estimated taxes… and the penalties are assess on each quarterly payment. If you desire to avoid the 8% penalty, ensure you make the payment.

Our friends at the Wall Street Journal recently published an article on this topic: A Surging IRS Penalty is Costing Americans Billions. Here’s How to Avoid It.

If you’d like to bring clarity to the amount of estimated taxes that would need to be paid in order to avoid the underpayment penalty (the “Safe Harbor”), simply upload your tax return. IAG will prepare a tax report which will include the Safe Harbor amount.

Impact Advisors Group LLC (“[IAG]”) is a registered investment advisor offering advisory services in the State of Massachusetts and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The information on this site is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This information should not be relied upon as the sole factor in an investment making decision. Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made will be profitable or equal any performance noted on this site. The information on this site is provided “AS IS” and without warranties of any kind either express or implied. To the fullest extent permissible pursuant to applicable laws, Impact Advisors Group disclaims all warranties, express or implied, including, but not limited to, implied warranties of merchantability, non-infringement, and suitability for a particular purpose. IAG does not warrant that the information on this site will be free from error. Your use of the information is at your sole risk. Under no circumstances shall IAG be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the information provided on this site, even if IAG or a IAG authorized representative has been advised of the possibility of such damages. Information contained on this site should not be considered a solicitation to buy, an offer to sell, or a recommendation of any security in any jurisdiction where such offer, solicitation, or recommendation would be unlawful or unauthorized.
Skip to content