Overview

We are liable to pay estimated taxes on our profits four times per year.

The corporate tax is 21%. Therefore we should anticipate paying a federal tax rate of 21% on all cash profits.

We also pay state estimated taxes. We get vouchers from our accounting team for the estimated tax payments to make when the taxes are completed, and pay them according to those vouchers.

There are specific dates when you have to pay this tax. It looks quarterly, but is not quite quarterly, beware of this.

• Dec 15: Paying for profits from Sep 1-Nov 30
• Apr 15: Paying for profits from Dec 1 of prior year-Mar 31 (four months!)
• June 15: Paying for profits from Apr 1-May 31 (two months!)
• Sep 15: Paying for profits from Jun 1-Aug 31

Steps

1. Ask the accounting team in the #finance Slack channel what our cash profits for the relevant recent period are. The team does not close the books officially until the end of each month, but by the middle of the month they should be able to give us a rough idea.

2. Compute the estimated tax, which is 21% of the cash profit. Alert the CEO of the payment amount and wait for confirmation from them.

3. Pay the tax. The federal tax online payment system is called EFTPS. Find the relevant credentials in 1Password.

   

   Click “Payments.

   

   Select form 1120.

   

   Select “Federal Tax Deposit”.

   

   Enter the correct amount. Confirm and submit!

4. Log the payment in our records. “Print” the confirmation page as a PDF. Save the PDF to the internal Notion database.