Once your Arizona homeschool business is established, you will need to pay appropriate state and federal income taxes on a quarterly basis. Both of these can be filed and paid online easily once the process has been set up.
As a self-employed person, you are able to deduct a large number of business related expenses, and these can be weighed out against the income that is produced. Keeping great records will minimize your tax liability and make the job easier to handle. Essentially you are doing a quarterly version of the annual tax return every three months.
Quarterly reporting periods and filing and payment dates
- January to March; file by April 15
- April to June; file by July 15
- July to September; file by October 15
- October to December; file by January 15 (although this may be extended up to January 18 depending on when the weekend and Martin Luther King Day fall.
Federal Estimated taxes (Self Employment Taxes)
- Use form 1040 ES (a quarterly version of the 1040 annual return)
- Estimate taxes on all income not subject to withholding tax
- Self Employment Taxes are theWithholding, Social Security and Medicare taxes that would normally be withheld from an employee’s paycheck
- The Medicare portion of the tax is 2.9% with no maximum.
- The Social Security amount is 12.4% of the first $106,800 income
- You are not required to file the estimated returns if for all of 2011 you were a U.S. citizen or resident alien and had no tax liability, or if you don’t expect to owe a net of $1000 or more for the annual income taxes.
- Fillable and printable form
- Cost to file: None but tax due must be paid when filing
- Filing frequency: Quarterly
- Penalty for late filing: None if you are owed a refund.
- Penalty for underpayment: Failure to File is 5% for each month late plus Failure to Pay is .5% for each month not paid in full, and interest is calculated daily at the federal short-term rate plus 3%.
- Electronic payment: Set up an account with EFTPS (Electronic Federal Tax Payment System), Electronic Funds Withdrawal or use credit or debit card. Payment can also be sent by check.
Arizona estimated taxes
- Use form 140 ES
- Follow the line-by-line instructions.
- Your payments for the year plus any Arizona withholding must total either 90% of the tax due for the current year or 100% of the tax due for the previous year to avoid penalties
- Cost to file: None but tax due must be paid when filing.
- Filing frequency: Quarterly
- Penalty for late filing: Late file penalty is four and one half of one percent of the tax due on the return per month from due date of the return until the date the return is filed.
- Penalty for underpayment: Late payment penalty is one half of one percent of the tax due on the return per month not paid.
- Electronic payment: Set up an account at www.AZTaxes.gov to file electronically or use credit or debit card. Payment can also be sent by check or taken directly to a Phoenix area Department of Revenue.
Next:
- Adding employees
- New Hire forms
- Federal withholding (FICA, Medicare)
- State withholding
- State and Federal Unemployment Insurance
Previous:
- Setting up a homeschool business in Ariz: 10 forms and payments you need to know
- Arizona Joint Tax Application
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