Hello Felicia,
It is great that you have been able to get your self all set up to take care of your anticipated future, federal tax obligations. And now lets work on doing the same, for the State of California.
The first thing to consider is what type of business entity you are establishing and whether you will need to make quarterly estimated payments.
You will need to make estimated tax payments if, by the end of the tax year, you expect to owe taxes more than:
- $500, if you are filing to the FTB as a corporation
- $250, if you married and/or filing RDP separately
- $1000, if you are self-employed
Also, both the IRS and the CA Franchise Tax Board expects your withholdings and tax credits to be less than at least one of the following:
- 90% of the current year's tax
- 100% of the previous tax year (alternative minimum tax included)
No matter the source of your income, if you expect to owe the amounts mentioned above, then you will need to file for estimated taxes. Otherwise, you'll become subject to tax liability.
As with every other state in the United States, California also requires you to make estimated tax payments. If you expect to owe an estimated tax of at least $500.
Due dates are spread throughout the year. The dates for California are the same as with the rest of the United States. The only difference is the percentage needed for each payment.
It is important that you respect all of these due dates. Otherwise, you will be subjected to tax liability, for not reporting your taxable income.
| Payment |
Amount |
Due date |
| 1 |
30% |
April 18, 2023 |
| 2 |
40% |
June 15, 2023 |
| 3 |
0% |
September 15, 2023 |
| 4 |
30% |
January 16, 2024 |
Figuring how much tax you have to pay can be slightly tricky, especially if you are only beginning as a self-employed person. The main idea here is to estimate just how much you're likely to owe at year's end, based on your income and expenses.
**Remember, it's always better to pay slightly more than slightly less when making your estimated tax payments. If you pay more, then you may get your money back.
You can pay by:
- Online:To make your payment online. Visit: CA FTB Payment Options
- or By Mail: Franchise Tax Board
PO Box 942867
Sacramento CA 94267-0008
- Use Estimated Vouchers 540-ES vouchers to pay your estimated tax by mail
- Make your check or money order payable to the “Franchise Tax Board”
- Write your SSN or ITIN and “2022 Form 540-ES” on it
For help on calculating your estimated taxes for California, there is additional information and a worksheet with instructions. Visit: CA Estimated Tax Worksheet
For more information on CA State speific information plaese visit:
California Estimated Tax Payments or,
FTB. CA . Gov Small Business
Hopefully this information will help!
Best wishes going forward,
Terri
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Terri Lynn H.
