IRS Tax Deadline: Sept. 16

The third-quarter estimated tax deadline for 2024 is Sept. 16, and failing to make the payment could result in a penalty. The IRS has released a reminder to ensure taxpayers are aware of this important deadline.

• The IRS emphasizes the importance of estimated tax payments, particularly for those who don't have enough taxes withheld from their paychecks.
• This includes income from self-employment, contract work, gig economy work, investments, and retirement income.

Who Needs to Make Estimated Tax Payments?

The IRS provides guidelines for determining whether you need to make estimated tax payments. Generally, you should make these payments if:

• You expect to owe at least $1,000 in taxes after subtracting your 2024 withholdings and tax credits.
• You can’t meet the so-called "safe harbor rules," which are explained below.

Safe Harbor Rules for Avoiding IRS Penalties

The "safe harbor rules" offer a way to avoid penalties for underpayment of estimated taxes. These rules stipulate that you can avoid penalties if you pay at least:

• 90% of your 2024 tax liability, or
• 100% of your 2023 taxes, whichever is smaller.

It is crucial to maintain these thresholds throughout the year to avoid penalties.

The safe harbor percentage increases to 110% if your 2023 adjusted gross income was $150,000 or higher. You can find your adjusted gross income on line 11 of Form 1040 from your 2023 tax return.

The Importance of Timely Estimated Tax Payments

While some taxpayers might assume that being within the safe harbor limits guarantees no tax payment penalties, this isn't always the case.

• Even with a refund, you can still face a "timing penalty," because the IRS requires tax payments on your income as it's earned.
• This penalty is based on the current interest rate and the amount that should have been paid, and it compounds daily.

IRS Quarterly Estimated Tax Deadlines

The deadlines for quarterly estimated tax payments in 2024 are:

• April 15
• June 17
• September 16
• January 15, 2025

Tax Relief for Natural Disasters

Taxpayers who have been impacted by natural disasters in certain areas may have extra time to make their third-quarter estimated tax payments.

• The IRS offers tax relief in disaster situations, and the specific details for eligible areas and extensions are available on their website.

Making Estimated Tax Payments

The IRS encourages taxpayers to make their estimated tax payments electronically for convenience and security.

• Use your online account, IRS Direct Pay, or the Electronic Federal Tax Payment System (EFTPS).

Key Takeaways

Understanding your tax obligations and making timely estimated tax payments is crucial to avoid penalties. Make sure you're familiar with the IRS deadlines, safe harbor rules, and payment options.

The IRS offers resources and guidance to help taxpayers navigate their obligations. Consult their website or contact them directly for any questions or concerns.