The tax forms your business needs to file usually depend on how your business is legally set up. Here’s a simple starting point:
Sole proprietorship or single-member LLC
You’ll report your business income and expenses on Schedule C, which is filed as part of personal tax return, Form 1040.
Partnership or multi-member LLC
Your business files Form 1065. Each owner then receives a Schedule K-1, which shows their share of the business income or loss to include on their personal tax return.
S corporation
Your business files Form 1120-S. Owners receive a Schedule K-1 showing their share of income, deductions, and other tax items to include on their personal returns.
C corporation
Your business usually files Form 1120. A C corporation is taxed separately from its owners, so the corporation itself pays tax on its profit.
You may also have state tax filings, payroll tax forms, W-2s for employees, or 1099s for contractors. If you’re not sure what applies to your business, Vyde can help you sort through it and make sure the right forms are handled.
You may need to issue a 1099-NEC if your business paid a contractor or other non-employee for services during the year.
In general, you may need to file a 1099-NEC when all of these are true:
If that feels confusing, you’re not alone. Contractor reporting is one of those tasks that seems simple until you’re trying to figure out who qualifies, what amount matters, and which form to use. Vyde can help you review your payments and prepare any required 1099s.
Business tax deadlines depend on your business type and whether your business uses a calendar year or a different fiscal year. For many calendar-year small businesses, the common federal deadlines are:
Sole proprietorships and single-member LLCs
Tax Form: Schedule C (which is attached to your personal tax return, Form 1040)
Deadline: April 15th
Extended Deadline: October 15th
Partnerships and multi-member LLCs
Tax Form: Form 1065
Deadline: March 15th
Extended Deadline: September 15th
S corporations
Tax Form: Form 1120-S
Deadline: March 15th
Extended Deadline: September 15th
C corporations
Tax Form: Form 1120
Deadline: April 15th for calendar-year corporations, though some corporations may have different deadlines depending on their fiscal year.
Extended Deadline: October 15th for calendar-year corporations
If a deadline falls on a weekend or legal holiday, the IRS generally moves the due date to the next business day.
Also, an extension gives you more time to file your return, but not more time to pay any taxes owed. The IRS specifically notes that an extension to file is not an extension to pay.
Vyde helps keep these deadlines visible so you know what’s coming and what steps need to happen next.
Yes, you may still need to file a tax return even if your business lost money.
A business loss can matter because it may reduce your taxable income, depending on your business type and tax situation. It can also affect future tax years, so it’s important to report it correctly.
Sole proprietorships and single-member LLCs usually report the loss on Schedule C with the owner’s personal tax return. The loss may be used to offset other income you have, reducing your overall taxable income.
Partnerships, multi-member LLCs, and S corporations usually pass the income or loss through to the owners on a Schedule K-1. The loss may be used to offset other income you have, reducing your overall taxable income.
C corporations report income and losses at the corporate level.
In plain English: filing when you had a loss is not just “extra paperwork.” It can help create an accurate record of your business and may affect what you owe now or later.
If you need more time to file your tax return, you can file an extension yourself or Vyde can handle everything for you.
1. How do I file an extension on my own?
You can file an extension directly with the IRS. The form you use depends on your business type:
Sole proprietorship or single-member LLC
Request an extension for your personal tax return using Form 4868.
Partnership, multi-member LLC, S corporation, or C corporation
Request a business return extension using Form 7004.
An extension gives you more time to file your tax return, but it does not give you more time to pay taxes you may owe. If you expect to owe taxes, you’ll usually need to estimate and pay that amount by the original deadline to help avoid penalties and interest.
2. How do I file an extension with Vyde?
Vyde makes the extension process simple from your dashboard.
We can also provide you with tax projections and any estimated payments due so you know exactly what to pay to the IRS to stay compliant and avoid penalties.
Usually, the money you take out of your business is not taxed simply because you transferred it to yourself. Instead, taxes are usually based on the business’s profit and your business structure.
Here’s a breakdown:
Sole proprietorship or single-member LLC
Owner draws are not taxed as a separate event. You’re taxed on the business profit reported on your personal return, not what you take out of the bank account.
Partnership or multi-member LLC
Distributions are not taxed separately when they are taken. Each owner is taxed on their share of the business profit, which is reported on a Schedule K-1.
S corporation
Distributions are separate from wages. If you work in your S corporation, you need to pay yourself a reasonable salary through payroll. Your salary is subject to both income and self-employment tax. Your distributions, however, are only subject to income tax. This can potentially lead to considerable tax savings.
C corporation
The money distributed to shareholders is called dividends. The corporation pays tax on its profits, and shareholders pay tax again when they receive dividends on their individual tax returns.
The key idea is this: taking money out of the business and being taxed on business profit are related, but they are not always the same thing. Vyde can help you understand how this applies to your entity type and specific situation.
If your business has employees, you generally need to issue each employee a Form W-2. A W-2 reports the wages paid to the employee and the taxes withheld from their paycheck.
Employers must also file W-2 information with the Social Security Administration, usually along with Form W-3. The IRS says employers must complete, file, and furnish Form W-2 for employees showing wages paid and taxes withheld.
If you use a payroll provider, they may handle some or all of this process for you. Vyde can help you understand what to check and how to stay on top of the filing requirements.
The amount you owe or receive as a refund depends on more than just your business profit.
Your final tax result can be affected by things like:
Because so many factors are involved, any estimate during the year is just that: an estimate.
If your books are up to date, you can get a better idea of where you stand. But a full tax projection may also need to account for personal tax details that are not always visible in your business reports.
Vyde can help you look at both your business numbers and broader tax picture so you have a clearer idea of whether you may owe or receive a refund.
There are several ways to lower your tax bill, but the right strategy depends on your business, income, entity type, and long-term goals.
Some common tax-saving strategies include:
Choosing the right entity structure
Your business structure can affect how you pay taxes. For example, some businesses may benefit from being taxed as an S corporation, while others may be better off staying as an LLC or sole proprietorship.
Maximizing deductions
A deduction, sometimes called a write-off, reduces the amount of income you are taxed on. The better your records are, the easier it is to capture legitimate business expenses.
Using tax credits when available
A tax credit directly reduces the amount of tax you owe. Credits are different from deductions and can be especially valuable when you qualify.
Contributing to retirement accounts
Certain retirement contributions may reduce taxable income while helping you save for the future.
Using health-related tax accounts
Depending on your situation, accounts like HSAs or FSAs may offer tax advantages for eligible medical expenses.
Planning ahead instead of waiting until tax season
The best tax savings often come from making smart decisions throughout the year, not just when the return is being filed.
Vyde can help you look for opportunities, stay organized, and make more confident tax decisions as your business grows.
You may be able to deduct a home office if you use part of your home regularly and only for your business.
To qualify, the space usually needs to be:
Used regularly
You use the space consistently for your business.
Used only for business
The space is not shared for personal use. For example, a kitchen table, guest room, or other shared space usually does not qualify.
Connected to your business
The space is your main place of business, or a place where you regularly meet with clients or customers.
A qualifying space could be a separate office, converted garage, dedicated studio, or another clearly defined area used for business.
There are some exceptions, such as certain daycare spaces or areas used to store inventory, so it’s a good idea to get guidance before assuming your space qualifies.
The home office deduction can help lower your business’s taxable income, but it generally cannot be used to create a business loss. In simple terms, it can reduce the amount of business income you pay taxes on, but it usually cannot make your business look unprofitable if it was not already.
There are two common ways to calculate the deduction:
Simplified method
This uses a standard dollar amount per square foot, up to a maximum square footage limit.
Actual expense method
This uses a percentage of certain home expenses, such as rent, mortgage interest, utilities, insurance, repairs, or maintenance. For example, if your home office is 10% of your home, you may be able to deduct 10% of certain eligible expenses.
Vyde can help you determine whether your home office qualifies and which method makes the most sense for your business.
You may be able to deduct vehicle expenses if you use your car, truck, or van for business.
The most important step is keeping good records. This includes recording your vehicle’s make, model, and year as well as the year you started using it for your business. You should also track your business miles, including:
Many business owners use a mileage tracking app to make this easier.
There are two common ways to calculate vehicle deductions:
Standard mileage method
This uses a set mileage rate for each business mile driven. The rate can change each year.
Actual expense method
This uses the business portion of actual vehicle costs, such as gas, insurance, repairs, maintenance, registration, lease payments, and depreciation.
The best method depends on how much you drive, whether you use the vehicle for both personal and business use, how expensive the vehicle is to operate, and how well your records are maintained. There are also IRS restrictions on when you can use or switch between the standard mileage method and the actual expense method. Because your first-year choice can affect your options later, it’s important to get it right and talk with an accountant before deciding. Vyde can help you compare the options and choose the method that fits your situation.
A business deduction, also called a write-off, is an expense that can reduce the amount of income your business is taxed on.
For example, if your business earns revenue and has qualifying expenses, those expenses may reduce your taxable profit. Lower taxable profit usually means a lower tax bill.
The key is that the expense needs to have a real business purpose. Good bookkeeping helps make sure deductions are captured correctly and supported with the right records.
Vyde helps track and categorize your expenses throughout the year so tax season is less stressful and your return is more complete.
There is no one-size-fits-all list of deductions because every business is different. What makes sense for a contractor may not apply to a designer, consultant, salon owner, or ecommerce shop.
In general, a business expense should be ordinary and necessary. That means it is common for your type of business and helpful for running or growing the business.
Common business deductions may include:
Cell phone and internet
The business-use portion of your phone or internet costs.
Conferences, seminars, and trade shows
Registration fees, booth costs, and related travel when the event has a clear business purpose.
Business travel
Flights, hotels, rental cars, and other travel costs when the trip is primarily for business.
Advertising and marketing
Ads, signs, website costs, branding, promotional materials, and marketing tools.
Business insurance
Liability insurance, property insurance, malpractice insurance, data breach coverage, or other business-related policies.
Interest
Interest on business loans, business credit cards, equipment loans, or other business debt.
Salaries and benefits
Employee wages and certain benefits, as long as they are reasonable and properly documented.
Business meals
Eligible meals with a clear business purpose, usually subject to limits.
Supplies and equipment
Tools, computers, office supplies, materials, and other items used in the business.
Software and subscriptions
Business software, apps, plugins, website tools, and other recurring subscriptions.
The most important rule is to keep business and personal expenses separate whenever possible. Using a dedicated business bank account makes it much easier to track expenses and support deductions.
Vyde can help identify, categorize, and report your deductions so you don’t have to figure it all out alone.
It depends on when the expense happened.
If the expense happened during the tax year you are currently filing, you may still be able to include it on that return. Send Vyde the details, along with a receipt, invoice, or bank statement, so we can help record it correctly.
If the expense happened in a prior tax year that has already been filed, you may need to amend that tax return to claim the deduction. An amended return is a corrected version of a tax return that has already been submitted.
If the past expenses are significant, it’s a good idea to talk with a Vyde tax professional before deciding what to do. We can help you understand whether amending makes sense and how to approach it.
The easiest way to track deductions is to keep your business finances organized throughout the year.
Here are a few best practices:
Use a dedicated business bank account
This makes it easier to separate business expenses from personal spending.
Save receipts and supporting documents
Receipts, invoices, mileage logs, and bank statements help support your deductions if questions come up later.
Categorize transactions regularly
Waiting until tax season can make bookkeeping more stressful and increase the chance of missing something.
Avoid mixing personal and business expenses
When personal and business spending are mixed together, it becomes harder to know what should or should not be deducted.
Work with a bookkeeping team
Vyde’s bookkeeping services help capture expenses, categorize transactions, and keep your records organized so your tax return is more accurate.
Good records are one of the best ways to reduce tax-season stress. Vyde helps you stay organized so you can focus more on running your business and less on sorting through receipts.
Keeping your business and personal expenses separate makes your bookkeeping cleaner, your reports more accurate, and tax season much easier.
The best way to do this is to use a dedicated business bank account and business credit card for business transactions. When everything runs through one account, it becomes much easier to see what your business earned, what it spent, and what may qualify as a deduction.
Mixing business and personal expenses can create a few problems. It can make bookkeeping more time-consuming, increase the chance of mistakes, and make it harder to support deductions if questions come up later.
It can also create legal and liability concerns for certain business types. If your business is an LLC or corporation, keeping clean separation helps show that the business is truly separate from you personally.
Vyde recommends opening and using dedicated business accounts as soon as possible so your records stay organized from the start.
Yes. If you paid for a legitimate business expense from a personal bank account or personal credit card, it may still be deductible as long as it was ordinary, necessary, and properly documented.
Make sure the expense is recorded correctly in your bookkeeping, and keep a receipt, invoice, or bank statement showing the payment and business purpose.
That said, using personal accounts for business expenses can make your records harder to manage. Whenever possible, use your business bank account or business credit card for business purchases.
Business owners should be familiar with three key reports: the Profit and Loss Statement, the Balance Sheet, and the General Ledger.
Together, these reports show how your business is performing, where your money is going, and what details make up the numbers in your books.
Profit and Loss Statement
Also called a P&L or Income Statement, this report shows your revenue, expenses, and profit over a period of time. It helps you understand whether your business is making money and where your money is going.
Balance Sheet
This report gives you a snapshot of your business at a specific point in time. It shows what your business owns, what it owes, and what is left for the owner.
General Ledger
This is the detailed record behind your reports. It shows the individual transactions that make up your bookkeeping categories.
You do not need to become an accounting expert to run a strong business. But understanding these three reports can help you make better decisions, spot trends, and feel more confident about your finances.
Your bookkeeping reports help tell the story of your business.
The Profit and Loss Statement shows how much money your business brought in, how much it spent, and whether it made a profit or took a loss during a certain period. This is often the best place to start if you want to understand how your business is performing.
The Balance Sheet shows what your business owns, what it owes, and what belongs to the owner at a specific point in time. This helps you understand the overall financial position of the business.
The General Ledger gives more detail. It shows the individual transactions that make up the numbers on your reports.
When reviewing your reports, focus on the big picture first. Look for trends, unusual changes, and areas where your business may need attention. You don’t have to understand every accounting detail on your own. Vyde can help you review your reports, understand what the numbers mean, and use that information to make more confident business decisions.
Bookkeeping categories help organize your business transactions so your reports are accurate and useful.
Here are the main categories you’ll see:
Assets
Assets are things your business owns. This may include cash, equipment, inventory, vehicles, or money customers owe you.
Liabilities
Liabilities are amounts your business owes. This may include loans, credit cards, unpaid bills, or taxes owed.
Equity
Equity is the owner’s share of the business after subtracting what the business owes from what it owns. In simple terms, it helps show what belongs to the owner.
Revenue
Revenue is the money your business earns from selling products or services.
Expenses
Expenses are the costs of running your business. This may include supplies, software, rent, payroll, insurance, advertising, and other business costs.
You can find a more detailed view of these expenses in Vyde’s bookkeeping classification guide.
These categories work together to create your financial reports. When transactions are categorized correctly, you get a clearer picture of how your business is doing.
Bookkeeping helps you understand what is happening in your business financially.
Good bookkeeping helps you track revenue, expenses, profit, cash flow, and deductions. It also gives your tax team the information they need to prepare your return more accurately.
Without accurate bookkeeping, it can be hard to know whether your business is truly profitable, how much you can afford to pay yourself, or whether you are setting aside enough for taxes.
Bookkeeping also helps you make better decisions throughout the year. Instead of guessing, you can use real numbers to understand what is working, what needs attention, and where your business may have room to grow.
Vyde helps keep your books organized so you can spend less time sorting through transactions and more time running your business.
A Profit and Loss Statement, also called a P&L or Income Statement, shows how your business performed over a specific period of time.
Think of it as your business’s report card. It shows:
Revenue: The money your business earned.
Expenses: The money your business spent.
Profit or loss: What is left after expenses are subtracted from revenue.
If revenue is higher than expenses, your business made a profit. If expenses are higher than revenue, your business had a loss.
Your P&L can help you understand whether your business is making money, where your biggest expenses are, and how your results change over time.
A Balance Sheet gives you a snapshot of your business’s financial position at a specific point in time.
It includes three main sections:
Assets: What your business owns, such as cash, equipment, inventory, or money customers owe you.
Liabilities: What your business owes, such as loans, credit card balances, unpaid bills, or taxes owed.
Equity: What belongs to the owner after subtracting liabilities from assets.
A Balance Sheet helps you see the bigger picture of your business. While the Profit and Loss Statement shows performance over time, the Balance Sheet shows where the business stands on a specific date.
A General Ledger is the detailed record of your business’s financial transactions.
It shows the activity behind each bookkeeping category, such as revenue, expenses, cash, loans, or owner contributions. The General Ledger is what supports the numbers that appear on your Profit and Loss Statement and Balance Sheet.
Most business owners do not need to review the General Ledger every day. But it can be helpful when you need to look closely at a category, find a transaction, or understand why a number appears on your reports.
Think of the General Ledger as the behind-the-scenes detail that helps make your financial reports accurate.
Usually, expenses should be recorded in the year they happened.
If an expense happened during the current tax year, it may be added to your current books and included on that year’s tax return.
If the expense happened in a prior year that has already been filed, it usually cannot simply be added to this year’s books. In some cases, you may need to amend the prior-year tax return to claim the expense.
There are also special rules for certain startup costs. Some expenses paid before your business officially began may qualify as startup expenses, but not all costs qualify and limits may apply.
If you find prior-year expenses, Vyde can help you understand whether they belong in the current year, a prior year, or should be reviewed as part of a tax strategy conversation.
Business credit refers to the creditworthiness and financial reputation of a company (rather than an individual). It reflects how reliably a business pays its debts, obligations, and vendor invoices.
A business credit report compiles data such as:
These reports and scores are used by lenders, suppliers, insurers, and other stakeholders when deciding whether to extend credit, set terms, or engage in business with a company.
Establishing and maintaining good business credit matters for several key reasons:
Access to financing & credit
A solid credit profile increases the chances that lenders, banks, or investors will approve loans or lines of credit for your business.
Better terms & rates
Strong credit may allow you to negotiate lower interest rates, longer payment terms, or more favorable conditions.
Separation from personal credit risk
When your business has its own credit profile, lenders may rely less on your personal credit for decision-making—reducing the risk to your personal finances.
Stronger vendor/supplier relationships
Suppliers may be more willing to extend trade credit (i.e. net payment terms) if your business demonstrates reliability via credit history.
Credibility & reputation
A strong credit profile signals stability and trustworthiness to partners, customers, and potential investors.
Reduced reliance on personal guarantees
Over time, good business credit can reduce or eliminate the need for personal guarantees when seeking credit or loans.
Additionally, without established business credit, new businesses may be forced to rely heavily on personal credit or face difficulty securing essential capital or credit lines.
A DUNS Number (Data Universal Numbering System) is a unique nine-digit identifier issued by Dun & Bradstreet to verify and track a business’s financial and operational identity worldwide.
A DUNS number is important because:
It’s often required when applying for business credit, government contracts, or large vendor partnerships.
It helps establish your business credit file with D&B, which is essential for generating your business credit scores.
It ensures your business information is accurately represented and can be verified by banks, suppliers, and customers.
Without a DUNS Number, it’s difficult to build or monitor your business credit profile with D&B.
For additional information, watch this video.
Once you enable a connection and approve data sharing between Vyde and Dun and Bradstreet, Vyde will automatically report:
This data can help build your business credit profile.
When you connect your Vyde account to Dun & Bradstreet, we automatically report key financial data that helps shape your business credit profile—including:
This information impacts your D&B scores and ratings, helping you strengthen your creditworthiness and financial reputation.
Your financial statements are an important part of your business credit profile. The following D&B scores are impacted by your financial statements:
D&B Failure Score: Predicts the likelihood of business failure (e.g., bankruptcy, ceasing operations without paying creditors). Financial statement data such as net worth, return on assets, and liabilities-to-net-worth ratio are key factors.
D&B Delinquency Score: Assesses the likelihood of severe delinquency or default. Financials help inform this score.
D&B Rating: Consists of two parts–financial strength (based on financials or employee size) and risk indicator. Supplying up-to-date financial statements can improve the financial strength component.
D&B SER (Supplier Evaluation Risk) Rating: Factors like the age and existence of balance sheets, net worth, and financial ratios are considered.
D&B Viability Rating: Uses financial statement data such as net worth, return on assets, and liabilities-to-net-worth ratio to assess risk.
Accounts Payable data is important for determining a business’s Paydex score, which is an indicator of creditworthiness.
Paydex Score: Calculated based on a business’s payment history. AP data, including payment timeliness, consistency, dollar-weighted transactions, and number of trade experiences, are important factors in calculating a Paydex Score.
You may need to issue a 1099-NEC if your business paid a contractor or other non-employee for services during the year.
In general, you may need to file a 1099-NEC when all of these are true:
If that feels confusing, you’re not alone. Contractor reporting is one of those tasks that seems simple until you’re trying to figure out who qualifies, what amount matters, and which form to use. Vyde can help you review your payments and prepare any required 1099s.
Vyde’s 1099 service can help take the stress out of preparing, filing, and distributing 1099 forms for eligible contractors. Instead of tracking deadlines and handling filings on your own, you can opt in to Vyde’s service and for a small added fee, our team will take care of the 1099 filing and distribution process.
Vyde’s 1099 service is simple and streamlined, so the process feels as easy as possible for you. Once you’ve opted in, just send our team your contractors’ completed W-9 forms and the amount you paid each contractor. Our team will take it from there and use the information you provide to help prepare, file, and distribute the required 1099s.
You’ll need a completed W-9 form for each contractor who may need a 1099, along with the total amount your business paid that contractor during the year. The W-9 typically includes key details such as the contractor’s legal name, business name if applicable, tax classification, address, and taxpayer identification number. Providing accurate and complete information helps avoid delays or filing errors.
To use Vyde’s 1099 service, be sure to opt in and upload your contractors’ completed W-9s by December 31. Then, you’ll just need to provide and approve the 1099 details by January 15. These deadlines help give our team enough time to prepare, review, file, and distribute your forms before IRS and recipient deadlines.
Vyde’s 1099 service includes a small initial setup fee, plus $5 per 1099. We do our best to keep this service as affordable as possible while helping you stay organized, meet deadlines, and get your 1099s filed and distributed accurately.
Catch up bookkeeping is for business owners who are behind on their books and need help getting organized. Whether you’re a few months behind or need help catching up from previous years, Vyde can help clean up your records, organize your finances, and get your business back on track.
Yes! If you’re behind on your bookkeeping or taxes, you’re not alone—and Vyde can help. Our team can work with you to get your books caught up, prepare accurate financial reports, and help you feel more confident about where your business stands.
The process is simple. You’ll connect your business bank accounts to Vyde so our team can securely download your prior year transactions. From there, we’ll review your business income and expenses, categorize your transactions, prepare your books, and provide the reports and support you need moving forward. If anything is missing or we have questions along the way, our team will reach out so we can keep the process moving smoothly.
Once your books are caught up, you’ll have cleaner, more organized financial records, helpful reports that show your business’s financial health, and better information for tax planning. Our goal is to help you feel prepared, organized, and ready to focus on what’s next for your business.
The cost of catch up bookkeeping can vary depending on how many months need to be completed and how complex your books are. The best next step is to schedule a call with our team. We’ll take a look at your situation, help you come up with a game plan, and provide an affordable option that fits your business’s needs.
Yes. Vyde offers catch up bookkeeping and tax preparation services for previous years. This service is available to Vyde subscription clients and can help you get caught up if you missed a filing deadline or need help preparing past tax returns.
Prior year tax preparation starts at $349 for personal tax returns and $895 for business tax returns. The final cost may depend on your situation, the type of return needed, and whether catch up bookkeeping is required to prepare your taxes accurately. Schedule a call with our team and we’ll help review your needs, come up with a game plan, and provide a quote that makes sense for your situation.
In many cases, yes. Accurate bookkeeping helps make sure your income, expenses, and deductions are properly accounted for before your tax return is prepared. If your books aren’t up to date, Vyde can provide you with bookkeeping tools or provide full-service catch up bookkeeping starting at $399 per month. Schedule a call with our team and we’ll review your specific situation to create the best solution for your business.
Filing prior year tax returns can help you get back on track, stay compliant with IRS requirements, and avoid additional stress down the road. When returns go unfiled, the IRS may charge penalties and interest, and it can make it harder to keep your business and personal finances organized. Vyde can help make the process feel more manageable by guiding you through what’s needed, helping prepare your returns accurately, and giving you a clearer path forward.
The important thing to remember about quarterly estimated taxes is that they are estimates. Your income, expenses, deductions, and overall tax situation can change throughout the year, so your estimated payments may need to change too.
If you make more or less income than expected, you may be able to adjust your estimate for the next quarter. However, because estimated taxes can affect penalties, cash flow, and your final tax bill, it’s a good idea to talk with an accountant before deciding how much to pay.
An accountant can help you review your income, expenses, business structure, prior-year tax return, and any personal tax factors that may affect your estimate.
Federal estimated taxes
There are two common ways to estimate federal quarterly tax payments.
1. Estimate based on current income
With this method, you estimate your net income for the quarter, then calculate the tax you may owe based on that amount.
Net income is your revenue minus business expenses. Some business owners use a general percentage of net income as a starting point, but this should only be treated as a rough estimate. Your actual tax rate may be higher or lower depending on your full tax situation.
The IRS also provides an Estimated Tax Worksheet on Form 1040-ES, which can help you calculate your estimated payments more carefully.
Because this method depends on accurate income and expense information, it is best to review the numbers with an accountant before making a payment.
2. Estimate based on last year’s taxes
Another option is to base your estimated payments on your prior-year tax return. This method can be helpful if your income varies or if you want a more stable payment plan throughout the year.
In some cases, paying enough based on last year’s tax can help reduce the risk of underpayment penalties. However, the rules depend on your income level and tax situation, so it’s important to confirm the right amount with an accountant.
State estimated taxes
State estimated tax rules vary by state. Some states follow a schedule similar to the federal deadlines, while others have different rules, forms, tax rates, and payment requirements.
Because state requirements can vary so much, check with your state’s Department of Revenue or taxation authority, and talk with an accountant to make sure you understand what applies to your business.
Quarterly taxes are not one-size-fits-all. Working with an accountant can help you make more accurate payments, avoid surprises, and feel more confident about your tax plan throughout the year.
Yes. Vyde specializes in helping business owners understand and plan for estimated taxes.
Through Vyde’s tax advisory services, you can meet with a tax accountant to review your business income, expenses, prior-year tax return, and other factors that may affect what you owe. From there, your accountant can help create a tax projection and recommend estimated payment amounts that are more tailored to your situation.
When Vyde prepares your tax return, we also provide estimated tax payment vouchers with suggested quarterly payment amounts for the following tax year, when applicable. These are based on the information available at the time your return is prepared.
If your bookkeeping is up to date with Vyde, your dashboard may also show current-year estimated quarterly tax amounts based on your more recent business activity. This can help you stay more informed as your income and expenses change throughout the year.
Because estimated taxes are based on changing information, they are never perfect. But working with Vyde can help you make more informed payments throughout the year, reduce surprises at tax time, and feel more confident about your tax plan.
Federal estimated tax payments are typically due four times a year.
The general schedule is:
First quarter: April 15For income earned January 1 through March 31
Second quarter: June 15 — For income earned April 1 through May 31
Third quarter: September 15 — For income earned June 1 through August 31
Fourth quarter: January 15 of the following year — For income earned September 1 through December 31
If a due date falls on a weekend or federal holiday, the deadline is usually moved to the next business day.
State estimated tax deadlines may be different from federal deadlines. Some states follow the federal schedule, while others have their own rules, forms, and payment systems.
Vyde can help you understand which estimated tax deadlines may apply to your business so you can plan ahead instead of scrambling at the last minute.
You may need to pay quarterly estimated taxes if you earn income that does not already have taxes withheld from it.
This often applies to business owners, freelancers, contractors, and self-employed workers. It can also apply to people who earn rental income, investment income, or other income where taxes are not automatically taken out.
The IRS generally expects taxes to be paid throughout the year, not just when you file your annual tax return. Employees usually do this through paycheck withholding. Business owners and self-employed workers often do it through quarterly estimated tax payments.
If your business is profitable and you expect to owe taxes, quarterly payments may help you avoid a large tax bill, penalties, or interest later.
Vyde can help you understand whether quarterly estimated taxes may apply to your business and how much you may need to set aside.
If you do not pay enough tax throughout the year, you may owe penalties or interest when you file your return.
This can happen when a business is profitable and the owner does not make estimated payments, but business income is not the only reason. Underpayment penalties can also happen if you have other income, such as retirement income, investment income, rental income, side income, or other earnings where not enough tax is withheld or paid throughout the year.
In general, you may be able to avoid underpayment penalties if you paid enough tax during the year based on IRS safe harbor rules. These rules often look at whether you paid a certain percentage of your current-year tax or enough based on your prior-year tax. The exact amount can depend on your income and overall tax situation.
The important thing is not to wait until tax season to think about taxes. Setting money aside throughout the year and reviewing your estimates regularly can help you avoid surprises.
Vyde can help you review your business income, other income sources, withholding, and estimated payments so you can create a plan to stay ahead of your tax obligations.
Getting started with Vyde is simple, and our team will guide you every step of the way. First, you’ll meet with a Vyde tax expert who will assess your bookkeeping and tax needs and help get you signed up for the best plan for your business.
Next, you’ll meet with an onboarding specialist who will help you get set up in your Vyde dashboard, link your business bank account, and get started in our bookkeeping software if full-service bookkeeping is not part of your plan. They’ll also help you get prepared for your first call with your tax accountant.
From there, you’ll meet with your tax accountant, who will learn more about your business and identify tax savings opportunities. After that call, you’ll receive a customized tax savings strategy that outlines key next steps, meeting frequency, and what we need to do to help prepare you for tax season and maximize your savings.
Vyde offers a range of accounting plans designed to support small businesses at every stage. Depending on the plan you choose, your services may include bookkeeping, tax advisory, tax filing, and ongoing accounting support that can scale with your business as it grows. Visit our pricing page to compare plans and see everything that’s included.
Yes! If tax advisory is included in your plan, you’ll receive accounting advice, financial insights, and tax strategy support from your Vyde team. You can schedule time with your accountant through your online dashboard, and you can also reach your dedicated team by phone, text, and email.
You can start with Vyde at any time. If your business has already been operating for part of the year, we can begin taking care of your bookkeeping right away. If you’d like Vyde to file your current-year taxes, we’ll need accurate bookkeeping for the full year, and we can help you catch up if needed.
Our plans are billed annually, but we do offer flexible payment plans to make things easier for your business. Our team can walk you through your options and help you choose the setup that works best for you.
Vyde offers a 30-Day Money-Back Guarantee on your initial payment. After the first 30 days, fees are generally non-refundable, and refunds are not issued for unused services, partial months, or canceled subscriptions. You can read the full details in our Terms of Service.
Our Terms of Service are posted online and available anytime here: https://vyde.io/terms-of-service/
We offer flexible, secure payment options to make paying for your plan simple. You can pay by credit card, debit card, or ACH payment.
Most business owners only think about taxes when a deadline is approaching or after the year has already ended. By then, many opportunities to reduce taxes may no longer be available.
A Tax Strategy Roadmap gives you a proactive, written plan for the year ahead. It helps you understand which strategies may apply to your business, what actions to take, and when those actions need to happen. It can also help you stay organized, prepare for estimated taxes, avoid last-minute surprises, and ultimately keep more of your hard-earned money.
Tax preparation looks backward. It reports the income, expenses, and financial decisions that have already occurred. Your Tax Strategy Roadmap looks forward. It identifies potential tax-saving opportunities and helps you make informed decisions before important deadlines pass. Tax preparation helps you file accurately, while tax strategy helps you plan more intentionally for what comes next.
Your Vyde tax accountant creates your roadmap after learning about your business, financial situation, and goals. Your accountant may review your bookkeeping, financial statements, prior tax returns, entity structure, income, expenses, and other relevant information. They will use those details to identify potential opportunities and build recommendations specific to your business.
Every roadmap is different, but it may address:
No. Every business is different, and your results will depend on your financial situation, eligibility for specific strategies, changes in tax law, and whether recommendations are implemented correctly and on time.
The roadmap is designed to identify potential opportunities, explain your options, and help you make more informed decisions. It does not guarantee a specific amount of savings.
You will generally receive your roadmap after you first meet with your Vyde tax accountant.
During that call, your accountant will learn more about your business, financial situation, goals, and potential tax-saving opportunities. They will then use that information, along with your available bookkeeping records, financial statements, and prior tax returns, to create a personalized roadmap for your business.
Your tax strategy should change as your business changes. If your income, expenses, ownership, entity structure, hiring plans, investments, or business goals shift, let your Vyde accountant know. They can review how those changes may affect your taxes and update your recommendations when appropriate.
No. Your roadmap is designed to help you understand your options, not pressure you into implementing every strategy.
Your Vyde accountant will explain the potential benefits, requirements, costs, and trade-offs of each recommendation. You can then decide which strategies make sense based on your business, goals, and financial situation.
Yes. Accurate, current bookkeeping is one of the most important foundations of effective tax planning.
Your financial records help your accountant understand your income, expenses, profitability, cash flow, and potential deductions. Incomplete or outdated books can limit the accuracy of your roadmap and make it harder to identify opportunities. The cleaner your financial information is, the more informed and personalized your recommendations can be.
Your roadmap should be reviewed throughout the year, especially when your business or financial situation changes.
Regular check-ins give your accountant an opportunity to review your progress, update projections, address new opportunities, and adjust your strategy before year-end. Tax planning works best as an ongoing process—not a one-time conversation during tax season.
Supporting small businesses is what we do. Let's chat about your tax strategy so we can help you keep more of your hard-earned money.
