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Jean   Murray

Using Tax Software to Estimate Business Taxes

By December 20, 2012

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If you haven't already, you should consider estimating your business taxes before the end of the year, for two reasons:

1. To get a handle on what you will need to pay, if anything, on your business profits and other income.

2. To make end-of-year decisions on shifting income and deductions, based on expected income in 2012 and 2013, and on potential changes in the tax laws.

You can do a run-through using the information you have for your estimated business profits and other income, using tax software to do the calculations. Check out this article by William Perez, Guide to Tax Planning,  describing his experiences calculating estimated 2012 taxes using several software programs.

William also includes information on three tax estimating programs, from Intuit, H&R Block, and the Tax Foundation. These programs don't require you to sign in or register. If you are planning on taking your taxes to a tax preparer, you can use these estimators to get a sense of what you might pay. After you sit down with your preparer, you might find things have changed, either because your preparer found some savings or because you forgot something.

How business types pay business taxes

For many small businesses, paying business taxes means completing Schedule C to be included with other personal and business income on their personal tax form 1040. Partners in partnerships and S corporation owners also pay their share of the taxes on business profits through their personal tax returns. Corporations pay their own taxes on the profits of the corporation, while corporate officers pay through their personal tax returns on their income as employees and on dividends received from stock ownership.

Read more about how business types pay business taxes.

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