April 15th has just passed us and I had quite a thrill.
I made my first estimated quarterly income tax payment.
I am known for being a bit quirky, off beat, and a friend who “requires explanation.” So I would not be surprised if you thought it weird that I found paying taxes thrilling this year.
You see, making a quarterly income tax payment indicates you are making money. Specific to my case, I am making money. My consultancy, for months “the little engine that could,” has taken off in a rather significant way. Most recently clients have walked in my door, and I have found myself enjoying this success. With that success has come income, and taxes must be paid.
As it turns out, when you work for yourself, the government wants to you to estimate your potential earnings for the year and also estimate the amount of tax you should pay on said earnings. You have to look into your magic crystal ball (for me my ball is a highly complex excel spreadsheet) and estimate what you are going to make this year, your anticipated deductions, and then the amount of tax you are going to owe. Estimate too high and you send the government too much money (which you will see when you file next year). Underestimate and you will not only owe the government but also have to pay a fine for underestimating.
Even me, with my PhD in statistics was a bit nervous originally thinking I would need a book keeper, accountant, CPA and tax attorney to help me through this. But I downloaded the form, went through the calculations, compared it to my spreadsheet, did some more research, and sent in my first check. Eureka!
Now, I can assure you this thrilled is short lived. While I skipped to the mailbox this first time