Reminder: Estimated Taxes for the 4th Quarter are Due!
Happy New Year! As we step into 2025, it’s time to get organized and make sure your taxes are in order for the upcoming year. If you're a family child care provider, don't forget that January 15th is the deadline for filing your federal estimated tax payment for the 4th quarter of 2024. This includes income earned during September, October, November, and December.
Understanding the 4th Quarter Tax Period
The 4th quarter covers the last four months of the year. Unlike the typical calendar quarters, these months are used to calculate your estimated taxes. Make sure you include all income earned during these months when estimating your tax payment.
Do You Need to File Estimated Taxes?
Many child care providers don’t need to file estimated taxes (IRS Form 1040-ES) because their spouse’s tax withholding typically covers them. However, if you're single or your spouse is unemployed or self-employed, you are more likely to need to file estimated taxes.
If you're unsure whether you or your spouse have paid enough taxes for September through December, it’s a good idea to make an estimated tax payment. Your goal is to have paid at least 90% of the taxes you owe for this quarter to avoid penalties. If you overpay, you’ll get a refund!
How to Estimate What You Owe
If you operated your business in 2023, use that year as a reference to estimate your taxes for the 4th quarter of 2024. If 2024 was your first year, you can use 20% of your gross income (including parent fees and any Food Program income) for the months of September, October, November, and December as a conservative estimate of what you owe.
How to Make Your Payment
You can pay your taxes by check or online using the Estimated Federal Tax Payment System (EFTPS).
Key Tax Deadlines to Keep in Mind
To help you stay organized, here’s a list of key upcoming tax deadlines. Note that if any of these dates fall on a weekend or holiday, they will be moved to the next business day:
January 15: 4th Quarter Estimated Tax Payment Due
January 31: W2 Forms Due, 1099-NEC/MISC Forms Due
March 15: S-Corporation and Partnership Tax Returns (or extensions) Due
April 15: Personal and Single Member LLC Tax Returns (or extensions) Due, C-Corporation Tax Returns (or extensions) Due, IRA and HSA Contributions Due for Prior Year, 1st Quarter Estimated Tax Payment Due
Be Proactive in Tax Planning
The best way to manage taxes is to plan ahead. Start getting your financial records organized early so that when tax season comes, you’ll be ready. Organize your receipts, bank statements, and any other necessary documents. The goal is not to file immediately but to stay proactive and avoid the last-minute rush.
For family child care providers, tax planning is critical to keeping your finances in order. Make sure you're setting aside enough to cover your taxes throughout the year, and don't hesitate to make estimated tax payments if necessary.
By staying ahead of the deadlines and keeping your records organized, you’ll have a smoother tax season and avoid penalties. Let’s make 2025 the year you minimize your taxes legally and set your business up for success!
