For those who don’t have taxes regularly taken from their paycheck, the deadline for the second payment of quarterly taxes is due Thursday, June 15.
There are two ways to pay taxes in the U.S.: withholding taxes from your paycheck, pension, or government payments, such as Social Security, or making quarterly payments throughout the year. Those who pay quarterly taxes include the self-employed, gig workers, retirees, businesses, corporations, and employees who don’t have enough taxes withheld by their employers throughout the year.
The deadline for the first payment, which covered Jan. 1 through Mar. 31, was due on Tax Day, April 18. The second payment, which is due Thursday, will cover April 1 through May 31. The last two payments will be due in September and early next year.
“Estimated tax payments are crucial for meeting tax obligations throughout the year, avoiding penalties,s and staying on top of your finances,” Sean Lovison, a Philadelphia-area certified financial planner and public accountant, told CNBC.
According to the IRS, you must pay quarterly individual estimated tax payments if you expect to owe at least $1,000 in taxes for the current year after subtracting withholding and refundable credits or an individual’s withholding and refundable credits are less than 90% of the tax to be shown on your current year’s tax return; or 100% of the tax shown on your prior year’s tax return.
Two IRS forms can help taxpayers determine their estimated taxes. Form 1040-ES, Estimated Tax for Individuals and Publication 505, Tax Withholding and Estimated Tah includes worksheets and examples to help taxpayers with dividend or capital gains income and those who owe alternative minimum tax or self-employment tax.
The IRS also has a wide range of tools and guides to help you through the process,s including an Interactive Tax Assistant, Tax Topics, and more. Certified Public Accountants and tax companies, including H&R Block, can also help.
There are various ways to pay your quarterly taxes, including by mail (make sure the postmark is before the due date), online through an IRS account, by phone, or with the IRS2Go app.
If you don’t pay, you’ll be subject to a penalty that will grow for every day it remains unpaid. However, the IRS will waive the penalty in the event of a disaster or unusual circumstance.
