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Good question.  You may be required to be making quarterly estimates and failure to do so could result in penalties.  I am going to answer this question with the most common answer from a CPA… – it depends.

You must pay taxes if:

  • You are a sole proprietor, partner, S corporation and/or self employed and you expect to owe more than $1000 in taxes when you file
  • You are a corporation and you expect to owe more than $500 in taxes when you file
  • You had a tax liability in the prior year

You do not have to pay if you meet the following three conditions:

  • You had no tax liability in the prior year
  • You were a U.S. citizen or resident for the whole year
  • Your prior tax year covered a 12-month period

Be sure to discuss your circumstances to your CPA to determine the amount you need to pay in your quarterly estimates.