Just when you thought taxes could be put off the forefront of your mind for a while, guess what? It is time to put quarterly taxes payments on the front burner.
Second quarter estimated tax payments for individuals and C corporations are due on Monday, June 17.
While we are listing dates, put these on your calendar. Upcoming due dates to pay your estimated taxes are:
Knowing the tax due dates is just the first of many steps. You will need to ensure that your tax preparation and planning is dialed in for meeting future payment dates confidently.
Knowing what you owe–and when–is the first step in proactively managing large sums owed and avoiding any unnecessary interest payments or late fees. All of which are an absolute must for cash-strapped small businesses.
Quarterly estimated tax payments are payments made by individuals and businesses to the IRS (and often to state tax authorities) on a quarterly basis throughout the year. These payments are required for those who do not have enough taxes withheld from their income or who receive income not subject to withholding, such as self-employment income, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. It is commonly seen in small businesses that bring in income through an LLC or S Corporation that may also apply to their personal income.
Quarterly estimated tax payments are a large part of tax planning for individuals and businesses with income not subject to withholding.
Proper estimation and timely payments can help avoid penalties, surprises, and ensure smooth tax filing.
Federal estimated tax payments are required if any of the following apply:
As long as you make quarterly estimates to cover 90% of your 2024 liability or 110% of your 2023 liability after subtracting your withholding and refundable credits, you will not be subject to penalties and interest.
Federal estimated tax payments are required if $500 or more of tax is expected to be owed for the year.
Corporations with a prior year tax liability (greater than zero), can utilize the prior year safe harbor by paying quarterly estimates equal to 100% of their 2023 tax liability. This means that paying what was owed the previous tax year is a relatively safe calculation.
Most states follow similar quarterly estimated tax rules but specific requirements may vary depending on the state. You should consult your tax professional to determine which states you may owe quarterly payments in.
If you have done your calculations and have determined it is time to make a payment, there are a few options. Payments can be made electronically using the IRS's Direct Pay option (individuals), Electronic Federal Tax Payment System (EFTPS) (C corporations), by check or money order using Form 1040-ES, or via other electronic payment options like credit or debit cards.
Knowing how much you owe and where you owe taxes can be, well, taxing. Avoid the uncertainty, hassle and potential financial consequences of making an (un)educated guess. Accountfully’s tax team can help you understand your tax responsibilities and make a plan to stay on top of your quarterly estimated payments. Getting started is just a quick call away! Share a bit about yourself and your needs and we can get you started on a plan that works for you.
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