The
next
quarterly
estimated
tax
payment
deadline
is
June 17
for
individuals
and
businesses,
so
it’s
a
good
time
to
review
the
rules
for
computing
corporate
federal
estimated
payments.
You
want
your
business
to
pay
the
minimum
amount
of
estimated
tax
without
triggering
the
penalty
for
underpayment
of
estimated
tax.
Four
possible
options
The
required
installment
of
estimated
tax
that
a
corporation
must
pay
to
avoid
a
penalty
is
the
lowest
amount
determined
under
one
of
the
following
four
methods:
-
Current
year
method.
Under
this
option,
a
corporation
can
avoid
the
estimated
tax
underpayment
penalty
by
paying
25%
of
the
tax
shown
on
the
current
tax
year’s
return
(or,
if
no
return
is
filed,
25%
of
the
tax
for
the
current
year)
by
each
of
four
installment
due
dates.
The
corporate
due
dates
are
generally
April 15,
June 15,
September 15
and
December 15.
If
a
due
date
falls
on
a
Saturday,
Sunday
or
legal
holiday,
the
payment
is
due
the
following
business
day.
-
Preceding
year
method.
Under
this
option,
a
corporation
can
avoid
the
estimated
tax
underpayment
penalty
by
paying
25%
of
the
tax
shown
on
the
return
for
the
preceding
tax
year
by
each
of
four
installment
due
dates.
(Note,
however,
that
for
2022,
certain
corporations
can
only
use
the
preceding
year
method
to
determine
their
first
required
installment
payment.
This
restriction
is
placed
on
corporations
with
taxable
income
of
$1 million
or
more
in
any
of
the
last
three
tax
years.)
In
addition,
this
method
isn’t
available
to
corporations
with
a
tax
return
that
was
for
less
than
12 months
or
a
corporation
that
didn’t
file
a
preceding
tax
year
return
that
showed
some
tax
liability.
-
Annualized
income
method.
Under
this
option,
a
corporation
can
avoid
the
estimated
tax
underpayment
penalty
if
it
pays
its
“annualized
tax”
in
quarterly
installments.
The
annualized
tax
is
computed
on
the
basis
of
the
corporation’s
taxable
income
for
the
months
in
the
tax
year
ending
before
the
due
date
of
the
installment
and
assumes
income
will
be
received
at
the
same
rate
over
the
full
year.
-
Seasonal
income
method.
Under
this
option,
corporations
with
recurring
seasonal
patterns
of
taxable
income
can
annualize
income
by
assuming
income
earned
in
the
current
year
is
earned
in
the
same
pattern
as
in
preceding
years.
There’s
a
somewhat
complicated
mathematical
test
that
corporations
must
pass
in
order
to
establish
that
they
meet
the
threshold
and
therefore
qualify
to
use
this
method.
If
you
think
your
corporation
might
qualify
for
this
method,
don’t
hesitate
to
ask
for
our
assistance
in
determining
if
it
does.
Also,
note
that
a
corporation
can
switch
among
the
four
methods
during
a
given
tax
year.
We
can
examine
whether
your
corporation’s
tax
bill
can
be
reduced.
If
you’d
like
to
discuss
this
matter
further,
contact
us.
©
2024