Ok, tax time around. LLC S-corp. My wife has her W2 and I do have mine. The profit is $100k. My tax accountant says I have to pay our tax bracket on this profit. In our case 30%. So $30k in taxes.
I get that I have to pay taxes but what is the best way to deal with this? I can’t predict the year end profit so I don’t want to pay quarterly.
How do you deal with this?
Google IRS Safeharbor Rules This will give you the authoritative answer to your question. There are specific rules in place that allow you to pay based on prior tax year numbers that are knowns. If you follow these rules you can avoid penalties no matter what your income ends up being at the end of the year.
Personally I’m not in agreement with the “just spend it” crowd, or the “just ignore it” crowd. I’m more of a spend less, save more and “knowledge is power” kinda guy.
I’m also not with the crowd “buy a G-wagon. You can write it off”. 🤪 Spending has to make sense otherwise what’s the point.