4th Quarter Estimates due January 16, 2024
The Internal Revenue Service reminds taxpayers who pay estimated taxes that they have until January 16th to make their payment for the 4th quarter of tax year 2023 without penalty.
Who needs to make a payment?
Taxpayers who earn income not subject to tax withholding such as self-employed people or independent contractors should pay their taxes quarterly to the IRS.
In addition, people who owed tax when they filed their current year tax return often find themselves in the same situation again when they file the next year. Taxpayers in this situation normally include:
- Those who itemized in the past but are now taking the standard deduction,
- Two wage-earner households,
- Employees with non-wage sources of income such as dividends,
- Those with complex tax situations and/or
- Those who failed to increase their tax withholding.
How to make an estimated tax payment
The fastest and easiest way to make an estimated tax payment is to do so electronically. Taxpayers have options when paying electronically from their bank account.
- Pay using IRS Direct Pay. This option allows taxpayers to schedule a payment in advance of the Jan. 16 deadline.
- Pay using IRS Online Account. This option allows taxpayers to view their payment history, pending or recent payments and other tax information.
- Pay using Electronic Filing Tax Payment System, or EFTPS. EFTPS is a free system which offers selections such as scheduling payments a year in advance, paying estimated tax payments and tracking and changing scheduled payments.
- Taxpayers also have the option to pay with their debit or credit card. The card processors, not the IRS, charge a fee for the service.
Using these or other electronic payment options ensures that a payment gets credited promptly.
Plan ahead
It’s never too early to get ready for the tax-filing season. For guidance, reach out to your accounting professional.
Source: irs.gov