Filing Quarterly Taxes

You've started your new business as a sole proprietor, and, so far, it is small. At the end of the first quarter, you have no employees and you have not paid out any wages. Because you have no employees, filing quarterly taxes will be easy. The Internal Revenue Service (IRS) does not require you to file any quarterly forms. Of course, you will still have to file your annual income tax return, due in April. When filing your annual income tax return, you must report the profits or losses of your business, using Schedule 1040C. On this form, you must add or subtract the figure of your business from your other income, if any.

Although filing quarterly taxes may not be a requirement for you, note that you need to pay enough income tax throughout the year to cover your income tax bill. This bill includes things like Social Security and Medicare. Filing your quarterly estimated tax returns in advance is wise, because you avoid paying interest and penalties in April, by filing quarterly. Use Form 1040-ES for filing quarterly taxes for your small business.