Estimated Tax Payments for Third Quarter due September 15!

hannah

Administrator
Staff member
Who needs to pay quarterly?
Typically, sole proprietors, partners and S corporation shareholders who expect to make over $1,000 should be making quarterly estimated tax payments. Individuals with income not subject to withholding, interest, dividends, capital gains, alimony and rental income also fall into this group. Certain groups of taxpayers such as fishermen, farmers, victims of natural disasters and others are not subject to estimated tax payments.

What if I underpay my estimated tax payment?
If an individual underpays their taxes or pays late, then a penalty will likely occur. Generally, you are not subject to estimated tax payments if you meet the following conditions:

  • You owe less than $1,000 in tax with their tax return.
  • Throughout the year, you paid the smaller of these two amounts:
- at least 90% of the tax for the current year
- 100% of the tax shown on their tax return for the prior year – this can increase to 110% based on adjusted gross income

If you underpaid on your estimated tax payment due to "unusual circumstances", the IRS may waive penalties. Examples of an unusual circumstance include, but are not limited to:

  • casualty, disaster or another unusual situation.
  • an individual retired after reaching age 62 during a tax year when estimated tax payments applied.
  • an individual became disabled during a tax year when estimated tax payments applied.

How do I know if I should be making estimated tax payments?
Taxpayers should use Form 2210 to figure out whether or not they should be making estimated tax payments.


For more information on Estimated Tax Payments, CLICK HERE.
 
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