Now that you’re an entrepreneur in charge of your own business, you have an obligation to pay estimated tax to the feds. If you don’t keep an eagle eye on your cash flow situation, you may find you don’t have the tax money when it’s due. Also, with all you have on your mind, you may forget to send in the money on time and have to pay a penalty.
It’s a good idea to put estimated tax money into a bank account you use only for that purpose. That way you can easily tell if you’re putting aside enough to meet your tax obligation.
You may find it convenient to use the Electronic Federal Tax Payment System (EFTPS) to transfer funds automatically from your bank account to the US Treasury. Corporations can schedule payments up to 180 days in advance, and individuals up to 365 days. It’s easy to set up, and you can do it online. Check out the details and enroll at www.eftps.gov.