Perhaps one of the most difficult parts of running your own private practice is gaining some awareness on how and when to properly pay your taxes. No one really teaches us this stuff in school, right?
First things first: when you run your own business, you must submit tax payments quarterly rather than annually. Anyone who is a sole proprietor, S-corporation, or self-employed mental health professional and will owe more than $1,000 in taxes is required to pay taxes four times a year in estimated payments. This estimated tax payment is a calculation based on assumptions around income tax, self-employment tax and any other tax you might be subject to as a practice owner.
Although this can often seem like a hassle in comparison to the Internal Revenue Service’s (IRS) annual system, it does allow you to prepare more and pay your taxes gradually, as opposed to paying them off in one large chunk.
Tax payments are due on the following dates for the associated business periods:
- April 15 – for January 1 through March 31
*If you did not file 2020 taxes quarterly, you'll file them all by this date.
- June 15 – for April 1 through May 31
- September 15 – for June 1 through August 31
- January 15 of the following year – for September 1 to December 31
If you’d like to file an extension, this is indeed possible! Many people choose to due to scheduling and time limits, or if they’ll be out of town and unable to file. The extension gives you until October 15th. Find more about filing for extension here.
The tax submission days reflected above are accurate at the time of posting of this article. The IRS allotted a tax extension in 2020 due to the COVID-19 pandemic. Any extensions for 2021 will be updated and reflected here.