IR-2024-231, Sept. 5, 2024
WASHINGTON — The Inside Income Service right this moment reminded taxpayers the deadline to submit their third quarter estimated tax fee is Sept. 16, 2024.
The IRS additionally reminded taxpayers affected by disasters in 17 states, Puerto Rico and the Virgin Islands that they might mechanically qualify for a delayed tax-payment deadline. Deadlines differ relying upon the catastrophe and locality.
Taxes have to be paid as revenue is earned or obtained in the course of the yr, both by means of withholding or estimated tax funds. Taxpayers comparable to gig staff, sole proprietors, retirees, companions and S company shareholders usually ought to make estimated tax funds in the event that they anticipate to have a tax legal responsibility of $1,000 or extra after they file their return.
A common rule of thumb is that taxpayers ought to make estimated tax funds in the event that they anticipate:
- To owe at the least $1,000 in taxes for 2024 after subtracting their withholding and tax credit.
- Their withholding and tax credit to be lower than the smaller of:
- 90% of the tax to be proven on their 2024 tax return or
- 100% of the tax proven on their full 12-month 2023 tax return.
Figuring estimated tax
To determine estimated tax, taxpayers calculate their anticipated adjusted gross revenue (AGI), taxable revenue, taxes, deductions and credit for the yr. To determine 2024’s estimated tax, it might be useful to make use of revenue, deductions and credit from 2023 as a place to begin.
Taxpayers can use the instruments on IRS.gov to verify in the event that they’re required to pay estimated taxes. The Tax Withholding Estimator, the IRS Interactive Tax Assistant and the worksheet in Type 1040-ES, Estimated Tax for People, all provide clear step-by-step directions.
Fee choices
The IRS encourages taxpayers incomes revenue not usually topic to withholding to contemplate making estimated tax funds all year long to remain present and keep away from a shock at tax time.
An digital fee is the best, quickest and most safe option to make an estimated tax fee. The Funds web page on IRS.gov supplies full tax fee data, how and when to pay, fee choices and extra.
Taxpayers can securely log into their IRS On-line Account or use IRS Direct Pay to submit a fee from their checking or financial savings account. Taxpayers may also pay utilizing a debit card, bank card or digital pockets.
Direct Pay and the pay by debit card, bank card or digital pockets choices can be found on-line at IRS.gov/funds and thru the IRS2Go app. Taxpayers ought to word that the fee processor, not the IRS, fees a payment for debit and bank card funds
Taxpayers may also use the Digital Federal Tax Fee System (EFTPS) to make an estimated tax fee. Fee by verify or cash order made payable to the “United States Treasury” can be an possibility.
Keep away from a penalty for underpayment
Taxpayers who underpay their taxes might should pay a penalty no matter whether or not they paid by means of withholding or by means of estimated tax funds. Late and skipped estimated tax funds can incur penalties even when a refund is due when a tax return is filed.
Taxpayers ought to use Type 2210, Underpayment of Estimated Tax by People, Estates, and Trusts, to see in the event that they owe a penalty. Taxpayers may also request a waiver of the penalty in the event that they underpaid due to uncommon circumstances and never willful neglect.
Particular guidelines apply to some teams of taxpayers comparable to farmers, fishermen, casualty and catastrophe victims, those that lately grew to become disabled, current retirees and those that obtain revenue inconsistently in the course of the yr.
Catastrophe-area taxpayers get extra time
Taxpayers who reside, work or have a enterprise in a disaster-area locality mechanically qualify for a delayed tax-payment deadline. Deadlines differ relying upon the catastrophe and locality. At present:
- Taxpayers in components of Arkansas, Iowa, Mississippi, New Mexico, Oklahoma, Texas and West Virginia have till Nov. 1, 2024, to make their estimated tax fee and
- Taxpayers in all or components of Florida, Georgia, Kentucky, Minnesota, Missouri, North Carolina, Puerto Rico, South Carolina, South Dakota, Texas, Vermont and the Virgin Islands have till Feb. 3, 2025, to make their estimated tax fee.
For particulars on all current catastrophe reduction, go to the Across the nation web page on IRS.gov.
1099-Ks for funds obtained in 2024
Taxpayers who have been paid by fee apps and on-line marketplaces or obtained any quantity by fee playing cards may obtain a Type 1099-Okay, Fee Card and Third Get together Community Transactions, for reporting funds obtained in 2024. This contains anybody with a “facet hustle,” sole proprietors and anybody promoting items and companies on-line.
Taxpayers should report their revenue, except it is excluded by regulation, no matter whether or not they obtain a Type 1099-Okay or some other third-party reporting doc. The 1099-Okay reporting threshold for third occasion reporting does not change what counts as revenue or how tax is calculated. Discover extra data at Understanding Your Type 1099-Okay.
The fourth and last estimated tax fee for tax yr 2024 is due on Jan. 15, 2025.