I know that this is something we've got to do, but what a topic. Paying quarterly estimated taxes. It is something that most CNAs, especially if they're 1099, need to be doing. And we're just gonna kind of talk about today how to do it, how to calculate it, things you need to be thinking about. Again, this is not a fun topic. It's not one of the ones you really want to think about. Anytime we've got to play the government, you don't want to think about it, right? Well, I want to talk about making money, not giving my money away. Yeah, yeah. But we like roads and sidewalks. Yes, we do. And museums, and I mean, we do have to pay taxes. Absolutely. But why do you pay quarterly estimated taxes? One, you're staying compliant. I think that's the big deal. If you're gonna owe money, you want to know it on a quarterly basis, probably rather than waiting till April when your CPA gets your tax return done to go, oh, Sharon, you owe $40,000, need a check tomorrow. You don't want to know that. So- It would be painful. That's painful. But by estimating every quarter, hopefully you've done a good job along the way doing your estimates, and you can avoid some of that interest and underpayment. Because, Sharon, if you don't pay every quarter and you owe money, the IRS is gonna go back and make you pay that interest and penalties there as well, too. Second thing is, like I was just alluding to, it's a smoother cashflow. Sometimes if you break it down into four quarters, it's a whole lot easier to fathom than having to come up with it all at one time. And if you can do that and plan for it all throughout the year, you could work a little more, you could move things around, you can do some things differently. You've got more time to utilize business expenses, but you've got to plan for that throughout the year. And sometimes it's tough to do it on a quarterly basis. Most accountants, when they do your prior year's tax return, they'll say, here's your quarterly estimated payments, pay this amount per quarter. That doesn't mean it's gonna be right for this year. If you're gonna make $100,000 more this year than you did last year, at some point you're gonna have to share that up. It might be that looking at it in the third quarter is better to do, and then spreading that payment out over the next two payments for the rest of the year, and then doing some tax planning in there along the way. It just helps you kind of manage that flow better. And then end of year, we all know that end of year is times that we're busy. We've got a lot going on. You just don't want that stress of having to worry about this at the end of the year, or worrying about it come April, or if you file an extension. Paying it along the way is a much better route to go. How do you calculate that? Well, it's not hard to do. The hard part is making sure you've got all the numbers. How much did I make this quarter? How much of my business expense is this quarter? And how much is my profit? If you're an S corporation, you paid yourself a salary. That's pretty easy to look at. When you paid yourself a salary, we withheld taxes. We withheld Medicare. We withheld Social Security. We can look back and see how much that's been withheld, right? If you're keeping up with all your business expenses, you know what? We can look at your P&L, your profit and loss statement. Say, oh, Sharon, well, you know what? You made $75,000 this quarter. Your net, after we had business expenses, we paid your salary. We put your retirement contributions in. Your net was $25,000. Well, Sharon, that $25,000 has not had any tax withheld on it. Your effective tax bracket is 20%. So 20% times 25,000, you need to pay $5,000 this quarter in quarterly taxes. I oversimplified that, but that's typically the way it works. And, you know, you've got to follow IRS guidelines. You know, maybe your accountant, your CPA, whoever you're working with can help you do this as well. Most CPAs don't do this every single quarter, but they should be doing it at least once a year to kind of sure you up as you go into the tax season. My accountant has access to my QuickBooks. Right, and they should. You know, that's the way to making sure that, you know, your bookkeeping's up to date and making sure that everything's working together, identifying, you know, places that you could utilize business expenses. You can do that by your QuickBooks. Looking at that, we got another section that we talk about this, but, you know, looking at your expenses from last year, comparison to this year. You know, last year we did this, Sharon. We don't have anything in that this year. Did you do this? Oh yeah, where did you do it? Well, you know what? I put it on my personal card instead of my business card. We need to make sure those deductions get over into the business. So there is a rhyme or reason to this stuff and keeping up with your business expenses and staying on top of it. Here are the dates for the quarterly estimates. April 15th, that's a very familiar day, right? Not only do you have to have your tax return done by then, but you have to pay your first quarter for the following year then too, Sharon. April 15th, if you've waited and you owe a bunch for last year, and now you've got to make a quarterly estimate for this year, double whammy. And then June 15th seems to come so fast after April. Well, that's only two months. It should really be March, you know, and then June. But April 15th and then June 15th, then September and your last payment doesn't come due in December because they want you to be able to buy Christmas presents. It says quarterly, but it's not quarterly. The tax is, the payment is not. Right, right. And this is confusing for some people. They go, oh, what's going on? But making sure you adhere to these dates. And if you miss a quarterly payment, you can always go back and pay it later. You can pay it in the next quarter. You can pay it. Remember, these are deadlines. So you can pay taxes anytime you want. You can go online and pay them. You can send them a check anytime you want. But just remember, if you miss these quarterly estimates and you did owe taxes, the IRS is going to start that clock ticking under payment penalties and interest. If you do not, like I was just saying, penalties and interest, failure to file, you're going to owe more than you originally did. And, you know, if you're not paying your estimated taxes, you know, the IRS could look at you a little harder because you owe more money. And that's something that, you know, could be a risk. And then, you know, again, you're making it harder to manage your finances. Like you just said, everything's due in April. You didn't make any payments for the year before. Now you've automatically gotten behind this year because you owe for the previous year and you can't afford to make your April payment. Then June's going to come up 60 days later. And are you going to have it paid by then? So again, staying on top of this is a key. Making sure that you understand this. You know, we can break this down pretty simplistic, but there's a lot going on in all this, you know? I mean, in CRNAs, even as smart as you guys are, Sharon, this is not your thing. But if you can just kind of get some of the basics here and get the understanding, what happens along the way, you start to learn it and it gets easier and easier. And the more repetitive we can make this, the more you'll understand it and you'll get a handle on it and things will go a lot smoother for you. First thing, keep accurate records. Whether that's through utilizing QuickBooks, whether you're spreadsheeting things, whatever accounting software you use, you need to be keeping accurate records. The worst thing you can do is think, oh, I didn't make a profit that quarter. And then you realize you made $50,000 in profit when you got to another quarter because your records weren't accurate. Number two, the tax man is coming, Sharon. We know he's coming, right? What are the two things we can count on in this life? Death and taxes. And guess what? I see a lot of CRNAs who do not account for taxes. Now, something you said in another episode and I thought it's great, and I think it's something that a lot of CRNAs can take away, whatever you make in your business, set aside 30% of it. Every time, tithe to the tax, tithe to the tax. But you might not owe that complete 30%, and that's okay. You might owe 31% or 32%, but you got 30 of it, and that's awesome, okay? That is a great number and a wonderful way to do that. Remember, if you're a S corporation, you're taking out your salary, so then you take 30% of what's left. Sharon, you made $40,000 last month, okay? We paid you a salary of 10, that left $30,000 in profit in your S corporation, right? We take 30% of 30,000, 9,000, we leave it in there. The other 21,000, you and Pierce go to Vegas, baby, and put it all on rent. Yes, that sounds like me. Yeah, but you get my drift here. You see what I'm talking about. And then the last thing, I know a lot of times CRNAs don't pay attention to this. How much money are you making? I've had CRNAs that have made $150,000 more in a year than they made the previous year, and they didn't really know it. I'm not sure. I don't know how much I've made. And then we pull back and we look at their, oh, you made 150 grand more. I did? Where'd it go? I've seen it happen. I'm sure you have. So making sure that you're monitoring that income, even if it's not on a quarterly basis, six months, at least by that third quarter of the year, taking a look at where you're at, that gives you enough time to plan between now and the end of the year and still make quarterly estimates or try to do something different. But there are resources for doing this. The IRS has an online tool. There's calculators out there on the IRS's website that you can kind of calculate what your estimated taxes should be if you're gonna do it yourself. Accounting software will do the same thing for you. We use it in our practice to estimate what our clients owe and where they're gonna be at. Or if you just say, hey, I don't wanna do this, I'm hands-off. Working with somebody who knows what they're doing and can help you as a CRNA meet these goals and objectives and make sure that everything goes smoothly for you, this is not an exact science. I will tell you this. I mean, this is always a guesstimate, okay? So a lot of CRNAs out there will get extremely upset with their CPA or their accounting firm that they're working with because they didn't nail it to the penny. That is not the way it works, folks. When you're given an anesthetic, Sharon's gonna give it different than the next CRNA down the road. And if Jeremy gives it, it's all screwed up, okay? But everybody does it different. Everything is gonna come out different. You're trying to get as close as you can. I mean, the goal here is not to give the government a free loan, but not to end up owing $100,000 at the end either.

quarterly estimated taxes

self-employed CNAs

compliance benefits

record-keeping

IRS deadlines