Taxes may be the last thing on people’s minds these days; however, the extended tax-filing deadline of July 15th is near. The three-month extension to file federal and most state tax returns also applies to estimated tax payments.
Many business owners and self-employed professionals—such as attorneys, doctors, dentists, consultants, real estate agents, and others who are not W-2 employees, have no taxes withheld on the income they receive when they receive it. Most taxing authorities, including the U.S. government, operate on a ‘pay-as-you-go’ basis. This means that tax is due on any income at approximately the same time it is received. To make tax payments for that income, ‘estimated taxes’ are due.