A critical tax deadline is less than two weeks away – and you should take the necessary actions now to avoid penalties.
This January 18 deadline is for those making estimated tax payments for the fourth quarter of 2021.
How do you know if you have to make an estimated tax payment?
Most people pay income tax when they earn money. This means taxpayers need to pay most of their taxes for the year.
You can do this by deducting it from your payslip or filing estimated taxes quarterly throughout the year to the IRS.
Self-employed people and investors typically pay taxes on their income through estimated quarterly tax payments.
For estimated tax purposes, the financial year is divided into four payment periods, and each period has a specific payment due date.
What happens if you miss the deadline?
If you miss a quarterly tax payment, penalties can accrue depending on how much you make and how late you are.
The IRS typically penalizes 0.5% of the tax owed after the due date.
For every partial or full month that you don’t pay your taxes in full on time, the percentage goes up. The penalty limit is 25% of the tax owed.
How to make an estimated tax payment
The fastest and easiest way to make an estimated tax payment is electronically through the IRS Direct payment.
Using IRS Direct Pay, you can even schedule payments in advance for the January deadline.
Another way to pay your taxes is by debit card, credit card or e-wallet.
If you don’t have the funds available to pay your estimated tax, don’t worry. The IRS gives you the opportunity to sign up for a payment plan.
Plus, we show you Great methods that can help you get rid of debt.
https://www.the-sun.com/money/4407480/tax-deadline-quarter-payments-january/ The important tax payment deadline is less than two weeks away