Tag Archives: estimated tax

Education, Illinois, Tips

How To Make IL Dept Of Rev (IDOR) Business Tax, Estimated Tax, and Extension Payments Online – UPDATED April 2025

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Did your accountant (possibly me) ask you to make a MyTax Illinois business tax payment for your Illinois pass-through entity, such as a Partnership or S-Corp — maybe an estimated tax payment or extension payment? And you’re not entirely sure how to make that happen? Well, you’ve come to the right place.

The big difference between making an Illinois Department of Revenue (IDOR) payment for an individual (or even with a sole proprietorship) and an entity-type business (for example, a Partnership, S-Corp, C-Corp, or Co-op) is that for an individual, you do NOT want to log into the MyTax Illinois system — it won’t work. But for an entity-level business, you MUST first log into the MyTax Illinois system — it’s the only way to get it to work. Once you know that little tidbit, the rest of it is pretty easy to figure out.

So, first things first: if you’re making a payment for your business entity, go to MyTax Illinois and log in under your business Username and Password. (But if this is for your personal taxes or Schedule C/ sole proprietor/ freelancer taxes, do not log in; instead follow these instructions.)

It will prompt you to verify your security code, usually sent to your business email address, and once you enter the two-factor authentication, you should see your IL business tax dashboard.

Go to the “Summary” tab.

On the ‘Summary’ tab, look for the ‘Business Income Tax’ section. (In other words, not the Unemployment Insurance, Withholding, Sales Tax or any other type of tax.)

Once you’ve found that section, look to the right of it. Click on the link for ‘View more account options’.

There are two ways to do it from here; the first is:

— In the ‘Account Options’ section, click the link for ‘Make An Estimated Payment’.

— Select the period you want to pay (which is 12/31/2024 for tax year 2024, if you’re paying a balance due or extension payment — or, choose 12/31/2025 if paying estimated taxes for any quarter in the current tax year).
— Click the first ‘Add Payment’ hyperlink in the Payment Schedule table for each payment you would like to schedule.
— If your payment information is saved in MyTax Illinois, you will see it as an option under ‘Payment Channel’.
— Otherwise, select ‘Use a new payment channel’ and enter your company bank info.
— In either case, on the right where it says ‘Payment’, you can change the payment’s debit date and enter the amount.
— Click Submit, and re-enter your password for security purposes.

Make sure to save or print the confirmation page that pops up as a pdf — for your files, but also please send it along to your amazing and dedicated tax preparer.

(If you miss that last bit, then please go into your payment history for this account and do a print-screen that includes the status section; it will show the amount, confirmation number, and date/time.)

And remember that when it comes time to log this payment in QBO, it will go in the “Taxes & Licenses” section of the Profit & Loss (not in the sub-account of Equity for personal tax payments). Please note the type of payment (balance due, extension, or estimated tax) in the memo, and the year to which it is being applied (and quarter if applicable).

That’s all there is to it! Congrats — you did it! I’m proud of you!

Alternative Approach — Now, just because I love it when people get really confused by having too many options, I’m going to point out that there is an alternative method to paying these taxes on the MyTax IL website. Should you prefer, you can follow these instructions instead… but I don’t recommend it, because it routes you to a “Select payment type” page that is a bit overwhelming if you’re not already a tax pro familiar with Illinois’ unique approach to forms and payment types. But if you insist… from the ‘View more account options’ page, you can do the following:
— In the ‘Periods and Submissions’ section, click the link for ‘View Account Periods’
— Click the 12/31/2024 link so that your payment is applied to tax year 2024 (or a later period if paying current-year estimated quarterly taxes)
— In the upper right corner of this page, click the ‘Make A Payment’ link
— Select the ‘Bank Account Debit’ link
— Click the IL-1120-ST Payment link (ST denotes a “Small Business” payment)
— Enter the amount you want to pay in the Amount and Confirm Amount fields
— Click Submit, and re-enter your password for security purposes

Either way, you’ve now made an Illinois state income tax payment for your pass-through entity, and you can sit back, relax, and enjoy all the other fun activities that come with being a small business owner.

One last thing… on the off-chance that you made a payment for the wrong period (some people get confused when making their 1Q estimated tax payment and instead book it to the prior year, since those tax returns are still fresh on our minds), IDOR finally has a way for us to cancel those payments instead of having to call and have them moved to the correct period. A client who made exactly that mistake this year sent me these instructions to share with y’all:

>> Log in
>> Go to Business Income Tax
>> View more account options
>> View Account Periods
>> Select the period
>> Select Payment Request
>> Then click Cancel Payment on the upper right.

Now you REALLY have everything you need to navigate the complexities of paying your business taxes on MyTax Illinois! And if possible, I hope that you’re able to do it all in good cheer. Hang in there, I see you. And you’re doing a great job.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Illinois, IRS, Tips

First-Quarter “Safe-Harbor” Quarterly IRS Estimated Tax Payments: Why and How to Make Them

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For years, we have stressed the importance to our clients of making quarterly estimated tax payments. And unlike many tax preparers, we also do bookkeeping, accounting, and consulting for our small business owners — so we’ve also encouraged them to have us do a quarter-by-quarter calculation of how much to pay.

There were many reasons for this:
· Making sure the client had their books up-to-date and reconciled for the quarter, so they can be used for real-time managerial decisions;
· Matching the cash flow of a given quarter (or the actual sales and vendor invoices, for accrual-basis clients) to the related tax liability;
· Preventing the common situation of getting to tax-time and having a huge refund or balance due.

However, times have changed. We still want folks to make quarterly payments (see my related IRS & Illinois posts for how to do it online), but for the first quarter, at least, we’re asking everyone to use “safe-harbor” calculations.

Why Use 1Q Safe-Harbor Calculations Instead of Annualizing?

For one, the immense number of changes to our tax code since the Tax Cuts & Jobs Act (TCJA) took effect in 2018 has made tax planning substantially more complex than it used to be. The amount of time it takes to do a “back of the envelope” or “paper napkin” calculation has tripled. (And in case you’re curious — we use tax software and Excel, not used envelopes and paper napkins in our firm. That’s how you know you’re working with a real professional.) Both the effort involved and the cost to the client have increased accordingly.

Relatedly, first-quarter estimated tax payments are due on the same day as personal 1040 and C-Corp 1120 taxes are due. And since our tax-time work is a deeper dive than it used to be, and the estimated tax calculations are more complex as well, there simply isn’t enough time to do a full-on calculation for each and every client that requests it — at least, not if we also want to be well-rested and in good health, so we can do our very best on the remaining annual tax returns.

There’s good news, too, however — the state of Illinois — and many other states, used legislation to create a loophole for getting around a pesky TCJA limitation on the State And Local Tax (SALT) deduction. I won’t explain it all here, but the result is that all of our S-Corp and Partnership (aka “Pass-Through Entity”, or PTE) clients are paying their personal state taxes through the company. This is a very easy and predictable calculation, as Illinois charges a flat tax (not socially progressive, but it certainly is simple) and requires the annual liability to be divided by four and paid evenly across the quarterly deadlines.

(Side note: the deadlines are not actually quarterly. Due to the timing of the federal government’s fiscal year-end and individuals’ calendar year-end, they are skewed such that they’re not even the same number of months per quarter. You would think that of all the government departments that could count properly, it’d be the IRS, but apparently not. The due dates are 4/15, 6/15, 9/15 and 1/15 — though many are better off making the final state tax payment by 12/31.)

As a result, quarterly calculations for the state simply aren’t necessary for the first quarter (possibly even the first three quarters, depending). Given that the states seem to live for assessing penalties and interest for underpayment of estimated taxes (they are wildly aggressive about it), this is the best approach to take.

But it’s not just the states that issue penalties and interest for underpayment of taxes — the IRS does, as well. Much less aggressively, however, and they do still have the notion (that the new Illinois PTE tax law does not) of “annualizing” your quarterly taxes. This means that you presume the amount you made year-to-date is representative of the whole year, and paying quarterly tax based on that projection. It works great for small business owners who have lower income in the first three-quarters of the year and then make most of their profit in the final quarter.

Just to be clear: we still do this for our clients… but we wait until the second or third quarter, and in some unusual cases, we wait until November and then do a thorough analysis of the year thus far. It’s just that there’s little point in running these calculations for the first quarter anymore — it’s almost never representative of the rest of the year, and it places them into a precarious situation where they may end up underpaying by too much and then owing penalties and interest. Or, at the very least, having to pay us at tax-time to fill out the complicated annualization schedule on the tax return. If you want to be more accurate with your calculation, because you expect your income to be substantially higher or lower than last year, then ask to book a May tax-planning session to get squared-up for the 2Q payment, due June 15.

Last, but not least — we’ve decided to have all our clients commit to a monthly bookkeeping and accounting contract with us. Doing annual clean-ups during tax season simply is no longer sustainable (to be honest I’m not sure it ever was, which is one of many reasons so many CPAs are burned out), and isn’t cost-effective. It’s also not fair to our other clients — who are on a monthly schedule — to have to wait in line while we work on those who swing through just once-a-year. And most importantly, we truly believe that all small business owners should be looking at their financial statements regularly to help them make impactful decisions throughout the year — ones that can sometimes be the difference between turning a profit or enduring a loss. And since everyone will be on a monthly schedule, the motivation no longer exists to do quarterly reviews for estimated tax purposes, purely as a way to get clients motivated to catch up on their books.

Where To Find Your Safe-Harbor Amounts and How To Pay Them

If you’re a client of ours, or of pretty much any tax professional out there, calculating safe-harbor quarterly estimates can and should be a part of preparing your annual tax return.

After reviewing and signing your return, your CPA (or EA, JD or non-credentialed preparer) will e-file it, and once it’s accepted by the IRS and state agencies, they will either send over vouchers (which I wouldn’t bother using, because we want to pay taxes online almost every time that’s an option), or a list of required payments — whether that’s in a letter or a little chart form where you can check ’em off. However you get them — put them in your calendar now. Do not rely on your tax preparer to remind you. This is not their job. You are a grown person running your own business, surrounded by technology that is designed for precisely this kind of thing.

While you’re at it, save these links for instructions on how to pay online:
– IRS: How To Pay IRS Quarterly Estimated Taxes Online — Don’t Let Your Checks Get Buried Or Lost In The Mail (msn.com)
– Illinois: How To Make Quarterly Estimated Taxes Online — Illinois IDOR | The Dancing Accountant

And if you’re in a panic and can’t find the amounts, the general rule is that you want to pay 1/4th-ish of your total tax liability for the prior year (a bit higher for some states, such as Illinois). Again, if we do your taxes, you should have already received these totals for 2024, or will be receiving them as soon as your return is finalized.

Frequently Asked Questions

1) What if I have an extension?
Two options here: a) provide your tax preparer all the docs you already have and ask them to do their best to give you an estimate; they can even add that to the amount you’ll need to pay with an extension — which means if your extension payment estimate is short, the 1Q estimate will make up the difference, and either way, you’ll just apply the balance to the current tax year; or, b) go ahead and keep paying the same amount you paid for last year’s quarterly taxes; some payment is better than none.

2) What if I don’t have a tax preparer?
All the DIY tax programs out there can do this, too — they’re not very helpful for the tax planning that we do with our clients for 2Q & 3Q, and certainly not for 4Q — but they do a perfectly fine job with safe-harbor estimates. Alternatively, check out my colleague Hannah Smolinski‘s great YouTube primer on how to calculate estimated taxes.

And since you asked, here’s a fabulous photo of Hannah and me at QuickBooks ConnectFest.


3) What if I can’t afford to pay my quarterly estimates?
Pro tip: Did you know you can break your quarterly payment into smaller chunks? Let’s say you owe $2400 per quarter and you’re worried that you won’t have enough set aside by the time the due date arrives, because it’s so hard not to raid your own savings account when opportunities call. Just go online and pay $800 per month instead. Or $200 per week. It gets tricky with the weird quarterly tax due dates, but you are a smart cookie and can figure out the math. The point is that you don’t have to save it all up and then make the payment. If you have cash on hand, you can go in there now and do it while it’s on your mind, even if it’s a partial payment. Something is better than nothing.

4) What if I forgot to pay for a quarter?
Go in there and make a payment now. The penalties are per day, so the sooner you make up the difference the better.

5) What if I have additional questions about the process?
Throw whatever you can at the quarterly estimates and contact a CPA to help you… after Tax Day. Please be respectful of the plight of tax preparers right now. It will not serve you long-term to try to wedge yourself onto someone’s calendar last-minute: almost all the good ones had a deadline for submitting tax materials weeks ago; we’re all exhausted and likely to make mistakes this time of year if we’re taking on too much and not taking care of ourselves; and you want to start off on a good foot when building a relationship with a trusted advisor. The amount of penalties and interest that will be due if you underpay slightly is not that significant if you’re going to be making up the difference in a month, so just pay what you can and get on-track later.

Now, get yourself online and go make those first-quarter safe-harbor quarterly tax payments, already!

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Illinois, Tips

How To Make Quarterly Estimated Taxes (Or Extension Payments) Online — Illinois IDOR

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Reminder: Due to a new (from 2021) law, Illinois S-Corp and Partnership owners should generally pay quarterly IL state (not federal) taxes through the business. The post below is about how to pay IL taxes personally; click here for how to make IL business tax payments.

There are multiple options for paying personal quarterly estimated taxes (and extension payments). You can: have your tax preparer create vouchers that you then print and mail with a check; prepare your own vouchers for the IRS and IL DoR; or pay online.

Since March 2020, agencies have had so many challenges with paper-mailed checks and vouchers that we are encouraging everyone to make all tax payments online.

The due dates for estimated quarterly taxes are approximately:
1Q: April 15
2Q: June 15
3Q: September 15
4Q: January 15 — however, for pass-through entity owners in states with PTE tax (especially for cash-basis filers), we recommend making the final payment by December 15.

If you want to know how to make IRS estimated tax payments, see my recent MSN article with step-by-step instructions.

For the Illinois Department of Revenue (IDOR), go to the MyTax Illinois site. If you already have an account for sales taxes or another reason — do not log in, unless you are making business tax payments. Then click the “> Make an IL-1040, IL-1040-ES, or IL-505-I payment” link (see screenshot above).

Next, follow the instructions for making a quarterly estimated tax payment; it will make you enter your personal information (SSN, etc.) and ask you what kind of tax payment you wish to make.

If you are making a personal (not business entity — again, that’s here) Illinois state extension payment, the process is the same, but you’ll want to select IL-505-I.

It may require you to enter your driver’s license information or your AGI from a past tax return to confirm identity and get your IL-PIN.

Then it will take you to a Payment Information page.

You’ll want to select “IL-1040 Estimated Payment” and enter your tax year. Make sure it’s for the correct year and quarter — this is very important. The example below is for the fourth quarter of 2021.

Again — if you’re making a personal extension tax payment, you’ll want to pick IL-505-I instead.

Then, enter your payment information and click the Submit button.

It will require you to enter and confirm your email address before clicking OK.

Make sure to print the confirmation screen, even though they will send you an email receipt — every once-in-a-while IDOR fails to push the request through, and the amount is not debited or recorded. If you have the print-screen, you can prove you attempted to pay it on-time and that the mistake was theirs.

It will also include a confirmation code, the date/time of the request, the reporting period and amount, and bank withdrawal information. You can click “Printable Confirmation” or just print the webpage to pdf.

Please make sure to note how much you paid to each agency and on which dates — and let your tax preparer know this information as well. Securely uploading copies of the final confirmation screen to your tax preparer or bookkeeper is a great practice, so they can easily store the info in your file.

And if you use QuickBooks or another bookkeeping program, please make sure to enter the quarter, year, and “estimated tax” so that you or your bookkeeper or accountant or tax preparer can make sure it’s applied to the correct year, and for the right type of tax. (And of course, if this is an extension payment, please enter the year and “extension” instead!)

For how to make IRS quarterly tax payments online, see my recent MSN article on the topic, for step-by-step instructions.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

IRS, Tips

How To Pay IRS Quarterly Estimated Taxes Online — Don’t Let Your Checks Get Buried or Lost In The Mail

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The IRS “Direct Pay” landing page.

There are multiple options for paying personal quarterly estimated taxes. You can: have your tax preparer create vouchers that you then print and mail with a check; prepare your own vouchers and do the same; or pay online.

Since March 2020, the IRS, USPS, and state revenue agencies have had so many challenges with mailed paper checks and vouchers that we strongly encourage everyone to make all tax payments online.

If you want to pay your federal estimated taxes online, the easiest way is to use IRS Direct Pay. Paying online offers confirmation that the payment made it to the agency, reducing the chance of issues down the road, especially if the check is lost in the mail or routed incorrectly in the processing department. It also allows taxpayers to be very clear about what type of tax and tax period are being submitted, again eliminating confusion on the part of the agency and preventing future problems.

Pro Tip: if you have questions about estimated taxes — what they are, whether or not you need to pay them, and how to calculate them — I recommend this great YouTube primer by my colleague, Hannah Smolinski of Clara CFO. It can easily be as much as 20-30% of each freelance check you take home, so get on top of this now… don’t wait until the money’s already been spent.

The due dates for estimated quarterly taxes are approximately:
1Q: April 15
2Q: June 15
3Q: September 15
4Q: January 15 — however for state taxes, especially for cash-basis filers and those in states with PTE tax, we recommend making the final payment by December 31st.

If you are paying online, I recommend making payments one day before the due dates, as sometimes it takes a day for the agencies’ systems to process payments due to overnight automated workflows. The funds are usually pulled from your bank account the same day or one day later, so there is very little wiggle room. This organization will actually send you reminder emails for each payment!

The great news is that you do not need to have an account with the IRS in order to make payments using Direct Pay.

Internal Revenue Service (IRS)

For the IRS, once you get to the Direct Pay site, select the following options (noted in the screen shot below): 1) the reason for the payment; 2) the form you would be mailing in if you weren’t doing this online; and 3) the year to which the payment should apply. For example, for 1st-quarter 2023 personal estimated taxes, you’d select the following:

IRS “Direct Pay” Step 1 of 5.

Pro Tip: you don’t have to wait until the due date for each quarter to make quarterly estimated tax payments! You can pay as early as you like. And if cash flow is a challenge, a great hack is to take the total tax payments required for the year and make monthly or bi-weekly — or even weekly — payments online. (Another trick is to increase tax withholding from your other sources of income, but not everyone has a W-2 job, and not all retirement companies will do that.)

There are many possible reasons for payment — such as extensions, balances due on a filed return, installment payments, amended returns, and so on. The IRS offers a list in their dropdown. For the purposes of this article, we’re focusing on quarterly estimated tax payments.

IRS “Direct Pay” List of Payment Reasons.

It’s extremely important that you select the correct year for payment. The IRS will levy late penalties and interest if you pick the wrong year, and the amount of time and effort that goes into contacting them and getting payments reapplied to the correct year will often cost more for your tax preparer’s time than filing your return in the first place. So keep in mind that the current year is usually the one you want for estimated tax payments, and a prior year is generally for extensions, balances due, installment payments, amended returns, and most other options. Selecting the correct year and type will ensure that these payments show up properly on your transcript.

Once you click the Continue button, you’ll be prompted to confirm the type of form and the period.

IRS Direct Pay Estimated Tax Payment and year confirmation.

At that point the system will ask you to enter a bunch of info to confirm your identity. The basic idea is to provide them name and address data from a prior-year tax return so that… well, so they know it’s really you. Since IRS Direct Pay works without a login, you will need to verify your identity each time you revisit it. Make sure you enter your name and address exactly as they appear on the tax return you are using for verification. If your name or address have changed, try selecting an earlier year for verification and enter the information from that year. This information does not need to be for the same tax year on which you are making your payment. It can be from as far back as 5 to 6 years ago depending on the time of year.

IRS “Direct Pay” Step 2 of 5, part one.
IRS “Direct Pay” Step 2 of 5, part two.

Once you enter all this information and hit the “Continue” button, it will take you to a screen to enter the payment information — amount, bank account, and email address for confirmation. If you are having issues with the system accepting your information, double-check that you’re entering your name, SSN, date of birth and address exactly as it was on the tax return for the year you selected. The IRS has a Direct Pay troubleshooting page if you have more questions.

IRS “Direct Pay” Step 3 of 5, part one.
IRS “Direct Pay” Step 3 of 5, part two.

Next, you’ll need to agree to the disclosure pop-up.

IRS “Direct Pay” disclosure pop-up.

In the final step, you will need to review all the information you have entered, provide an electronic signature including social security number or ITIN, and check the box to authorize the debit. Click Submit and you are done!

Well… except that you may also have to pay state estimated taxes. See here for my post on how to make personal Illinois estimated tax payments. (But if you have an S-Corp or Partnership, see here instead.)

Please make sure to note how much you paid to each agency and on which dates — and let your tax preparer know this information as well. Securely uploading copies of the final confirmation screen to your tax preparer or bookkeeper is a great practice, so they can easily store the info in your file.

And if you use QuickBooks or another bookkeeping program, please make sure to enter the quarter, year, and “estimated tax” so that you or your bookkeeper or accountant or tax preparer can make sure it’s applied to the correct year, and for the right type of tax.

Many self-employed folks get surprised at tax-time with huge balances due, penalties and interest. Don’t let yourself fall into that trap — make regular payments online and taxes will be a breeze next year.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Illinois, Software, Tips

How To Make IL Dept Of Rev (IDOR) Business Tax Payments Online: Estimates & Extensions – UPDATED

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The step-by-step instructions I painstakingly wrote up earlier this year for making business replacement income tax estimated and extension payments are now out-of-date, because IDOR revamped their MyTaxIllinois website in September (grrrrr). So here are the basic instructions (screenshots are coming soon, but this will have to do for now):

— Log into the business’s My Tax IL account
— On the ‘Summary’ tab, look for the ‘Business Income Tax’ section
— Click on the link for ‘View more account options’

There are two ways to do it from here; the first is:
— In the ‘Account Options’ section, click the link for ‘Make An Estimated Payment’
— Select the period you want to pay (which is 12/31/2021 for tax year 2021 — choose a later period if paying estimated taxes for 2022)
— Click the first ‘Add Payment’ hyperlink in the Payment Schedule table for each payment you would like to schedule.
— If your payment information is saved in MyTax Illinois, then in the ‘Choose’ tab you can select the dropdown under ‘Payment Channel’
— Otherwise, select ‘New’ and enter your company bank info.
— In either case, on the right where it says ‘Payment’, you can change the payment’s debit date and enter the amount.
— Click Submit, and re-enter your password for security purposes

Alternatively:
— In the ‘Periods and Submissions’ section, click the link for ‘View Account Periods’
— Click the 12/31/2021 link so that your payment is applied to tax year 2021 (or a later period if paying 2022 estimated quarterly taxes)
— In the upper right corner of this page, click the ‘Make A Payment’ link
— Select the ‘Bank Account Debit’ link
— Click the IL-1120-ST Payment link (ST denotes a “Small Business” payment)
— Enter the amount you want to pay in the Amount and Confirm Amount fields
— Click Submit, and re-enter your password for security purposes

Congrats, you did it!

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.