Whether you're in the middle of 2020, or in the middle of 2021, the end of Q3 is a special time for you to get your financial foundations in place.
Here are some things you need to understand to make sure your books are done because that’s when the best work happens.
- Estimated tax payment is typically due in September.
Make sure you're on track with estimated tax payments. You want to be able to account for your decline or growth. Try to see if you've had a significant decline in revenue because you might not need to make that payment anymore.
- Take a look at your numbers and see if you've increased by 20%.
If you’ve had at least a 20% increase over your prior year, make sure you take a look at your tax numbers. Otherwise, if you owe enough tax, you'll get penalized for not having increased that amount. And that's the ramification of not looking at it.
- Make your payment by 9/15.
9/15 is the Q3 due date. But if, for some reason, you didn't make any payment on 9/15, don't freak out. Just make it as soon as you can. The IRS set due dates so that they can keep track of it. And if you don't make the full amount, they penalize you based on those due dates, but you can make them anytime you want to.
- Check the overall payroll compensation (for S corp or LLC situations)
For an S corp LLC situation, evaluate your overall payroll compensation depending on the growth of the business because you can legally minimize tax by having that escort vehicle.
- Your best work happens when the books are done.
You can't do tax planning and strategy without your books being done. So if you actually don't have your accounting and bookkeeping in place, or if it's in a backlog and not in shape, Q3 is the best opportunity to do this. The reason to get your books done is not just for filing tax purposes, but there's an energy to that when you have ownership over your books and you understand your numbers.
If you want to learn more about tax planning, check out 023: Prime Year-End Tax Planning Happens When Q3 Ends
