# Do i need to file quarterly?



## capnb (Jan 23, 2013)

Hi guys. I just launched my clothing company.

I am currently paying my state taxes quarterly.
I have barely any income to speak of, and especially for my first year I will be in the red.

Do I need to file income tax quarterly as well? I am just a little confused and the IRS website made me more confused.

I am just an individual/sole proprietorship right now.

I appreciate any help!

Thanks guys


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## williekid (Apr 22, 2009)

If not mistaken you file for the materials you bought, you don't pay taxes on labor until the end of the year. Not too sure tho maybe someone else can join the thread and help guide you in a more firm direction. Its a lot to running a business, learning the skills of the trade is one thing, then managing orders, to outputting and supplies, then final the big thing is keeping track of all and filing. That's where I lack as well, I think we all go through it.


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## acmeprinting (Jun 4, 2007)

Cap'n,

Not sure what state your in but I am in Texas. When I first started my business I wasn't making enough sales to file quarterly. But because my status on the paperwork was that I would file quarterly I had to file every three months regarless if I make sales or not. YOU HAVE TO file something even though you are filing "zero" sales. You have to file. One year I told them that I was just starting out and that I did not have alot of sales and all they had to do in their paperwork was change my status to filing yearly. YOU HAVE TO TELL THEM YOU WANT TO FILE YEARLY. As far as claiming my supplies for the year, I don't have to unless I am selling my business. Don't go by what I say because I don't want to give you any incorrect information for your situation and where you live so the best thing to do is talk to one of the clerks in the tax office. Thats the best thing and safest thing to do.


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## williekid (Apr 22, 2009)

I know last year I didn't really push my business but I still had a dba and tax id number. Im from Texas as well and had to file every three months even if its zero and I didn't do that but they allowed me to go back and file zero then make up for it on the next quarter. Well when the last quarter came around I forgot all about it just due to issues I was facing. My ex partner use to be in charge of all of that and when we split I kept the company and it was hard for me to manage it. With that being said, that year I had only really did one large job which required me to purchase huge rolls of vinyl. Since I did not file anything for that last quarter the irs sent me a letter saying I owed so much in taxes. I could not understand or figure it out. All I could assume was that they were able to track the rolls of vinyl I purchased and made me pay taxes on them. Til this day im still all over the place about taxes and it has really pushed me to just take a course on being a tax preparer just to be able to manage my business.


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## acmeprinting (Jun 4, 2007)

When I started and didn't have sales for the quarter (when I was on quarterly) I didn't file. I got letters saying they were going to take away my Tax ID number so I went to the office to find out why and that is when I got the info taht I could change my status from quarterly to yearly. I do my own sales taxes and woukd go over it with the clerks and I was on the right track. Now I file online. So far so good.

WillieKid, did you take a class on federal taxes or state taxes?


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## binki (Jul 16, 2006)

You need to pay either 100% of your previous year liability or 90% of what your current year liability is. To file quarterly it is based on your quarterly estimate of positive income. If you have none then don't file. We use a CPA to help us figure this stuff out.


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## capnb (Jan 23, 2013)

Thanks guys!

I am filing for state tax online (because I have my state tax id) (my first quarter was nothing, this one will be something when I have to file in December) but I guess my biggest question is if that's all I need to do for now that I am not selling much at all, then do my full yearly income taxes as usually next year since I am still an individual?

I do want to meet with an accountant soon money is just super tight and I'm trying to see if I can figure it out at least for the short term right now.


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## williekid (Apr 22, 2009)

I was filing online as well, was just too complicated for me at the time, I was going through too much and wasn't focused. I'm sure I would be able to do it now if I attempted. Possibly if you go up to the county clerks they might allow you to do it annually, so I been told if you don't make enough you can file annually. I never took that option I just filed every three months as stated previously if you don't make income on that quarter you can just file 0 but you have to be careful on filing zero too many times. If you are caught lying which I strongly encourage you NOT to do, the irs has potential to audit you and you will be in a hole paying. If you don't pay they take your business. As for me, no I have not taken the class yet, really hoping once the new year starts. I just got tired of asking questions. I have a sister who helps me but really its help when they have the time and patience. Even at that all questions I have are unknown, or I heard differently from all so I rather just find out for myself. (YES, I believe you file on what you sold not that I recall. Have you tried calling the county clerks office to ask the question? I'm sure they will be able to tell you one quick answer. For this exact reason of not knowing how to do this, it pushed me to close my tax id number, keep my dba and now I just pay taxes on everything as I go. Either way you end up paying one way or another, and just like those who get a tax break, ill receive a tax credit. Although I do believe its cheaper to have a tax id number.


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## GordonM (May 21, 2012)

Some of the replies here may be mixing income taxes and sales taxes.

If you meant sales tax, and you're on a quarterly schedule, see if your state allows annual filings for someone in your revenue range. For income tax, state and federal, it's just usually better to file quarterly so you're not socked with a bigger tax bill at the end of the year. You might have to pay penalties and interest if you miss that payment.


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## capnb (Jan 23, 2013)

GordonM said:


> Some of the replies here may be mixing income taxes and sales taxes.
> 
> If you meant sales tax, and you're on a quarterly schedule, see if your state allows annual filings for someone in your revenue range. For income tax, state and federal, it's just usually better to file quarterly so you're not socked with a bigger tax bill at the end of the year. You might have to pay penalties and interest if you miss that payment.


Yes, that's what I was going to ask.
I am filing quarterly for sales tax (ny state sales tax only) with my tax ID number/certificate of authority.

For income tax I just assumed it was yearly since I am still an individual, but I guess I need to look into that. I have not been filing quarterly. 

Does anyone here know where I file for income tax online? Is it just through the IRS website?

I have only made a couple hundred bucks in my first 2 quarters that I have had my tax ID and I don't plan on making a ton before April so it might be easier to just file then. Who would I contact to see if I can file annually? Local county clerk? IRS directly?

Thanks so much guys!

I do plan on seeing an accountant at some point to really learn some more about all this.


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## GordonM (May 21, 2012)

For the IRS, you file the return on April 15, but you need to have paid estimated taxes (if any) during the tax year itself -- you pay in 2013 for the 2013 tax year. If you wait until April 15 2014, and you owe for 2013, you'll have to pay penalties and interest. Of course, if you're not making a lot, the penalty and interest may not be much.

So to clarify, for income taxes, you pay quarterly (if possible), but file a return once a year. For sales tax, it is not uncommon to file and pay once a year, if you're a small fry. Different states handle this in different ways.

For income tax filing, I'd get TurboTax or whatever you like best, and use their tools. They all offer options for online filing.


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## capnb (Jan 23, 2013)

GordonM said:


> For the IRS, you file the return on April 15, but you need to have paid estimated taxes (if any) during the tax year itself -- you pay in 2013 for the 2013 tax year. If you wait until April 15 2014, and you owe for 2013, you'll have to pay penalties and interest. Of course, if you're not making a lot, the penalty and interest may not be much.
> 
> So to clarify, for income taxes, you pay quarterly (if possible), but file a return once a year. For sales tax, it is not uncommon to file and pay once a year, if you're a small fry. Different states handle this in different ways.
> 
> For income tax filing, I'd get TurboTax or whatever you like best, and use their tools. They all offer options for online filing.


Thanks Gordon!


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## williekid (Apr 22, 2009)

You can file free online and sometimes at your local library or you can purchase turbotax and use that software. For the most part you just need receipts, adding totals of gas,supplies,losses etc. And yes for sales tax its why I was saying you file quarterly and for income tax is yearly. The penalty is maybe $50 if late past the quarterly due date. Ill be gathering the info on my taxes pretty soon, I can give you more detailed info of what you need to jot down if needed when I get around to doing mine.


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## capnb (Jan 23, 2013)

williekid said:


> You can file free online and sometimes at your local library or you can purchase turbotax and use that software. For the most part you just need receipts, adding totals of gas,supplies,losses etc. And yes for sales tax its why I was saying you file quarterly and for income tax is yearly. The penalty is maybe $50 if late past the quarterly due date. Ill be gathering the info on my taxes pretty soon, I can give you more detailed info of what you need to jot down if needed when I get around to doing mine.


Cool. thanks williekid!
Receipts are just for backing up your expense records right?
I keep track of all my expenses but some of the receipts I'd have to track down.

And are expenses claimed yearly as well? Or if I had to file quarterly would expenses be recorded for each quarter? I just want to make sure that expenses from the whole year count towards my income tax return...


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## williekid (Apr 22, 2009)

Expenses are yearly along with how much you made throughout the year. Only thing that gets files quarterly from my understanding is sales tax, meaning the materials you purchased through that quarterly period that you didn't pay taxes on. And yes receipts are to have proof of purchases in case you get audited or need to show proof for some reason or another. No problem, always willing to pass it forward.


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## sben763 (May 17, 2009)

Get Quickbooks and set it up for your local taxes and federal. If you enter everything expenses and sales it makes everything easy. Every state is diffrent for sales tax so best to contact local tax department. Mine is yearly as I don't collect more then $500 in sales tax due to most my work being schools, charities and non profits. Whether you have go pay quarterly with the IRS depends on your revenue being made. If you do the Quickbooks and then use turbo tax it will automatically figure everything. Each year it will also tell you your quarterly payments estimated on the previous year. If you make a bunch more money then the previous year you will need to re figure the quarterly payments so you won't have to pay any penalties or interest.


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## GordonM (May 21, 2012)

williekid said:


> Only thing that gets files quarterly from my understanding is sales tax, meaning the materials you purchased through that quarterly period that you didn't pay taxes on.


You file quarterly, semi-annually, or annually to the state to remit the sales tax you have collected. They couldn't care less about stuff you bought using your resale license -- unless they think you're using it for personal items and avoiding sales tax, which is a huge no-no. (On edit I guess this could depend on the state.)

You should also keep track of any exempt sales of your own where you didn't collect tax for something sold within your state. Provide this info upon request.


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## GordonM (May 21, 2012)

capnb said:


> Receipts are just for backing up your expense records right? I keep track of all my expenses but some of the receipts I'd have to track down.
> 
> And are expenses claimed yearly as well? Or if I had to file quarterly would expenses be recorded for each quarter? I just want to make sure that expenses from the whole year count towards my income tax return...


Receipts back up your expenses, though depending on the expense and how "reasonable" it is, you don't absolutely need a receipt.

Your operating expenses are claimed annually to the IRS and state income tax. Those go from Jan 1 to Dec 31. They have no bearing on paying the sales tax you have collected.

Your cost of goods expenses are (usually) claimed as you sell your inventory. Most of us purchase t-shirt blanks and other items as we need them, meaning we have little inventory on hand at any given moment. However, you need to be careful how you account for large inventory costs, like buying three years worth of shirts at once. In most cases typical for small business you can't simply expense off all your inventory costs at once.


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## binki (Jul 16, 2006)

Talk to a CPA. There is a lot stuff being said here that you may or may not be able to use.


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