Final 2024 Quarterly Estimated Tax Payment Due January 15
The Internal Revenue Service (IRS) has issued a reminder that the fourth and final estimated tax payment for 2024 is due on January 15, 2025.
Who Needs to Pay Estimated Taxes?
Taxpayers who receive income not subject to withholding are generally required to make estimated tax payments. This includes:
Self-Employed Individuals: Those earning income through freelance work, contracting, or other self-employment activities.
Investors: Individuals with significant income from dividends, interest, or capital gains.
Retirees: Those receiving income from pensions, annuities, or other retirement sources without withholding.
Businesses and Corporations: Entities with income not subject to withholding.
Avoiding Penalties
To avoid underpayment penalties, taxpayers must pay at least 90% of their current year's tax liability or 100% of the prior year's liability, whichever is smaller. Given the recent increases in IRS penalties for underpayment, it's crucial to ensure timely and accurate payments.
Payment Methods
The IRS offers several convenient methods for making estimated tax payments:
Online: Payments can be made directly through the IRS Direct Pay system.
Electronic Federal Tax Payment System (EFTPS): A free service for both individuals and businesses to pay taxes online.
By Mail: Using the payment vouchers included in Form 1040-ES.
Additional Resources
For more detailed information on estimated taxes, including calculation methods and payment schedules, refer to the IRS's Estimated Taxes page.
Ensuring that your clients meet the January 15 deadline for their final 2024 estimated tax payment is essential to avoid penalties and stay compliant with IRS regulations.
Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.
