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TomCopeland 01:04 PM 11-14-2011
You may or may not need to pay estimated taxes quarterly, depending on your family situation. If you are single and your day care business is your only income, then you must file quarterly using IRS Form 1040ES Estimated Taxes. The form is basically a deposit slip where you enter how much you are paying. The deadline for the 4th quarter of 2011 is January 15, 2012. If you are married it may be that your husband had enough withheld from his paycheck to cover your taxes. If not, you can have him withhold more, or you can file quarterly.

You face possible penalties if you did not have at least 90% of the tax you owed paid each quarter. What you should do now is file the 3rd quarter Form 1040ES and pay in an estimate of the taxes you owed for January - August 31. A rough estimate of the federal income taxes and Social Security taxes you will owe is about 20% of your gross income. Then file the 4th quarter form. Don't worry about the IRS catching you. Sometimes they do, sometimes they don't - it's out of your control. There is no grace period for your first year in business.

You should also check with your state department of revenue to see if you need to file quarterly state estimated taxes.
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