[atria]

Interesting. When I ran my S Corp, my goal was to avoid estimated tax payments. At the end of the year, the accountant would calculate the required taxes and I would issue a "net zero" check that only paid taxes, or a bonus check with a enormous withholding. The remainder was taken out as a dividend.

Taxes paid via withholding are treated as if they are paid in through the course of the year which avoids estimated tax payment penalties.

[cullenking]

Yeah, I just do the quarterly estimated payments. If your business is constant (not growing) it's easy to handle via extra withholdings. If you are growing, they at least make it easy so that if you pay an estimated tax that matches the prior years tax owed (paid quarterly) you avoid any penalties, even if you have to make a lump payment to settle up the difference when you do your taxes at the end of the year.

We have a pretty sophisticated business intelligence platform written in R that gets us estimated revenues within 10%, so I know how to budget through the year for taxes owed. I just pay my known quarterlies and keep enough in the bank to handle the remainder at year end.