Hey folks, as is tradition here at Sooter Consulting we wanted to remind you that 2026 estimated taxes are due on June 15th! If you have been using the Profit First system: Nice! In all likelihood you will have more than enough to cover this payment stress-free! If you aren’t using Profit First, remember that it is imperative that you pay soon or file for an extension.
Don’t know how to file an extension. Well, the IRS site has incredibly detailed guides on how to handle all sorts of tax related situations! Alternatively, reach out to us and we can connect you with an EA or a CPA to assist you with any question you may have.
Why Estimated Taxes Matter
Estimated taxes allow you to pay your income tax obligations throughout the year rather than facing one large bill at tax time. For many business owners, this creates several advantages:
- Smaller, more manageable payments throughout the year.
- Better cash flow planning.
- Reduced risk of spending tax funds on business operations.
- Potential avoidance of penalties and interest charges.
- Fewer surprises when tax season arrives.
Remember, estimated tax payments are only paying an estimate. Your actual tax liability may be higher or lower when you file your return. That’s why working with a qualified tax professional is always recommended.
Do You Need to Pay Estimated Taxes?
Not everyone is required to make estimated tax payments. However, you may need to if:
- You are self-employed.
- You own a business that does not withhold taxes from your income.
- You receive significant income from investments, dividends, interest, or capital gains.
- You earn income through freelance or gig work.
- You expect to owe at least $1,000 in federal income taxes after accounting for withholding and credits.
- You do not have enough taxes withheld from other income sources.
If you’re unsure whether estimated payments apply to you, now is the perfect time to check with your accountant rather than waiting until penalties begin to accumulate.
A Simple Way to Estimate Your Payments
While every tax situation is different, the general process follows a familiar pattern:
1. Estimate Your Income
Start by projecting all income sources for the year, including:
- Business income
- Self-employment earnings
- Rental income
- Investment income
- Other taxable income
2. Estimate Your Deductions
Next, identify deductions you expect to claim, such as:
- Business expenses
- Home office deductions
- Retirement contributions
- Mortgage interest
- Charitable donations
- Other eligible deductions
3. Calculate Taxable Income
Subtract your estimated deductions from your estimated income.
4. Estimate Your Tax Liability
Apply current tax rates to determine your projected tax obligation.
5. Account for Existing Withholding
If taxes are already being withheld from employment income or other sources, subtract those amounts from your estimated liability.
6. Determine Your Payment Amount
Your tax professional can help calculate the appropriate estimated payment based on your unique circumstances and prior-year tax returns.
The Profit First Solution
One of the most common reasons business owners struggle with estimated tax deadlines isn’t that they didn’t earn enough money.
It’s that they accidentally spent the tax money.
The Profit First system addresses this problem by creating a dedicated Tax Account. Every time revenue comes in, a percentage is automatically allocated to taxes before the money can be spent elsewhere.
This simple habit creates separation between operating cash and tax obligations. Instead of wondering where the money will come from when June 15th arrives, the funds are already waiting.
It’s a lot like packing an umbrella before the rain starts. You may not need it today, but you’ll be glad it’s there when the weather changes.
Ways to Make Your Payment
The IRS offers several payment options:
- Electronic Federal Tax Payment System (EFTPS)
- IRS Direct Pay
- Credit or debit card payments
- Check or money order by mail
- Tax software platforms that support estimated payments
Whichever method you choose, don’t wait until the last minute. Processing delays can happen, and missing the deadline may result in unnecessary penalties and interest.
Need Help Preparing?
If the June 15th deadline is approaching and you’re unsure about your estimated tax obligations, now is the time to seek guidance.
At Sooter Consulting, we help business owners gain clarity around their finances, implement practical cash management systems, and avoid common tax surprises. Whether you’re new to estimated taxes or looking to strengthen your Profit First system, we’re here to help.
After all, tax season shouldn’t feel like a fire drill. With the right systems in place, it’s simply another scheduled stop on your financial journey.