Understand that you only "FILE" a tax return once a year. That's it. But for a business you have to "PAY" taxes each quarter. You don't "FILE" any kind of a return when you "PAY" your quarterly taxes. Then like I said earlier, if you send the IRS 20% of your ***GROSS*** business earnings each quarter, come tax "FILING" time you'll be fine. You deal with business expenses and other deductions at tax "FILING" time.
Basically, if at tax "FILING" time so long as what you owe the IRS *AT THAT TIME* is less than $1000 or less than 10% of your total tax liability (whichever is *higher*) then no underpayment penalty is assessed. But if at tax "FILING" time if what you owe the IRS exceeds $1000 or 10% of your total tax liability (again, whichever is *higher*) then you will be assessed an underpayment penalty for underpaying your quarterly taxes.
THat's why I use the magic number of 20%. So long as your withholding on any other W-2 income is sufficient to take care of the liability on that other W-2 income, my recommended percentages will suffice just fine.
