The Small Business Tax Help Blog

Posts Tagged ‘self_employment’

Question: Quarterly tax payments for an independent contractor?

I just got done paying my 2010 taxes as an independent contractor (self employed). I have never done quarterly payments….this year I owed almost $4,000 in self employment taxes for federal and my state combined. I want to make quarterly payments for 2011, but I have already missed the first deadline….is it better to just pick up with the 2nd payment and make that, the 3rd and 4th payment on time, or not pay quarterly taxes at all? Usually I just pay in a lump sum at the end of the year…I was charged a slight penalty for 2010 but it wasn’t much at all. What should I do, continue with the quarterly payments or just skip it and get on track with them properly next year?

Answer: Neither. Make the first payment now. The penalty for being two weeks late is much less than the penalty for missing the payment completely.

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Question: Employment Tax Audit on Closed Business?

i received a forwarded letter from edd to inform me of an employment tax audit on my closed business. My corporation has been closed for several months. EDD wants my former corporation to pay 40k in tax penalties. What are my options? I no longer have this business.

Answer: As an officer and/or majority shareholder of the defunct corporation you are liable for any unpaid taxes. With this much money at stake, you’d be wise to consult with a local CPA or EA, and possibly an attorney.

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