Estimated Quarterly Taxes for S Corp - Please Explain Like I'm 5

Let me break this down simply for you: With an S Corporation, the company itself doesn't pay federal income taxes. Instead, the profits "pass through" to you as the owner. So here's what you need to know: For YOU personally: Yes, you should make quarterly estimated tax payments on both your salary AND your share of company profits. You pay these using Form 1040-ES, and you can pay online through the IRS Direct Pay system or IRS.gov/payments. For the S CORP: The company doesn't pay federal income tax, but it may need to make tax payments for: - Employment taxes (Social Security and Medicare) on your salary - State taxes (depending on your state) For estimating when you don't know your income yet, you have a couple options. You can either pay 100% of last year's tax liability (safe harbor rule), or make your best estimate based on what you've earned so far. If you're brand new, you'll need to project your income for the year and calculate roughly 25-30% of profits for federal taxes, plus employment taxes on your salary.

After spending hours pulling my hair out over the same S Corp tax confusion, I found an amazing tool called taxr.ai (https://taxr.ai) that helped me understand my specific situation. It analyzed my S Corp structure and explained exactly what I needed to pay and when. I was especially confused about estimating taxes when my business income was all over the place, and their system gave me clear guidance on how to handle quarterly payments. They even helped me understand the reasonable compensation requirements for S Corps, which is something the IRS really watches.

Just wanted to follow up - I tried taxr.ai after posting my skeptical comment and I'm seriously impressed. I've been avoiding doing my quarterly estimates because I was so confused, but this actually made it manageable! The tool calculated exactly what I needed to pay for both federal and state, and it explained the whole "reasonable compensation" thing in a way that finally clicked for me. It even showed me how to avoid underpayment penalties if my income changes throughout the year. Definitely recommend to any other S Corp owners who are lost in the tax maze like I was!

If you need to actually talk to someone at the IRS about your S Corp tax questions (which I did), I found Claimyr (https://claimyr.com) to be super helpful. Trying to call the IRS business tax line was a nightmare - I kept getting disconnected or waiting for hours. Claimyr got me through to a real IRS agent in about 20 minutes who answered all my S Corp quarterly tax questions. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c. The agent walked me through exactly which forms I needed for my situation.

Wow, I have to eat my words. After being completely skeptical about Claimyr, I decided to try it yesterday because I was desperate to ask about my S Corp's estimated tax requirements before the quarterly deadline. I got connected to an actual IRS business tax specialist in about 30 minutes (compared to my previous attempts where I couldn't get through at all). The agent walked me through exactly which forms I needed to file for my S Corp and for myself personally, and explained how to calculate estimated payments when my income is inconsistent. Honestly a game-changer for S Corp owners trying to navigate the tax system.

One thing no one mentioned yet - if you're just starting your S Corp, you might qualify for the "first year in business" exception for estimated taxes. The penalties for underpayment are sometimes waived if it's your first year operating as that business type. But don't rely on this! Better to make your best estimate and pay something rather than nothing. I usually take my monthly profit so far, multiply by 12 to annualize it, then calculate tax on that amount and divide by 4 for quarterly payments.

Quick tip for new S Corp owners: save 30-40% of ALL your profits in a separate account for taxes. Better to have too much saved than not enough! My first year with an S Corp I got KILLED with taxes because I didn't realize I needed to make estimated payments.

As someone who just went through this exact same confusion last year, here's what I wish someone had told me upfront: **For YOU personally:** Make quarterly estimated payments using Form 1040ES. You can pay online at irs.gov/payments. Set up an account and it's pretty straightforward once you find the "Make a Payment" section. **For the S Corp:** No quarterly income tax payments needed, but you DO need to handle payroll taxes if you're paying yourself a salary. Use EFTPS (Electronic Federal Tax Payment System) for employment tax deposits. **Estimating when you're new:** I used the "annualized income installment method" - basically, I calculated my tax liability based on actual income earned each quarter instead of trying to guess the whole year. Form 2210 has the worksheet for this. **Pro tip:** Open a separate business savings account and automatically transfer 35% of every deposit. This covers federal taxes, state taxes, and self-employment taxes on pass-through income. Adjust the percentage based on your tax bracket, but 35% kept me safe in my first year. The IRS has a pretty decent S Corp tax guide (Publication 589) that explains the pass-through taxation and salary requirements in plain English. Way better than trying to piece it together from random articles online!