Estimated Quarterly Taxes

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Estimated Quarterly Taxes

Problem:

Have you ever thought it odd that the due dates for estimated quarterly taxes are the 15th of January, April, June and September?  Those dates are not all 3 months apart.  Two of them occur in the second quarter; a quarter which is typically not the strongest for many companies.  And April 15th is Federal income tax day already.  Why have an estimated quarterly income tax payment due on the same day?  Isn’t that a double-whammy to cash flow?  (Yes, most of the time, it is.)

Solution:

This is not like changing Christmas from December 25th to August 13th.  It’s just one small thing we can certainly do through Congress, by changing the payment schedule for estimated tax payments.  Here are a couple of reasonable options which could be put forward for discussion:

Option #1:  (This avoids April 15 and spreads the payments apart by 3 months each.)

February 15
May 15
August 15
November 15

Option #2:  Let each business decide their own schedule, as long as there is at least one payment every 6 months.  The estimated tax due for the year would still need to be paid throughout the year, but each business would pay according to the strength of their cash flow.  This would be especially attractive to businesses with large seasonal swings in the business cycle.  As always, good cash flow equals good jobs.