WASHINGTON, D.C. — As the September 16, 2024 deadline approaches, the Internal Revenue Service (IRS) has issued a reminder to taxpayers regarding the submission of their third quarter estimated tax payments. The IRS emphasizes the importance of staying current with tax obligations, particularly for those whose income is not traditionally subject to withholding, such as gig workers, sole proprietors, retirees, partners, and S corporation shareholders.
Estimated tax payments are crucial for taxpayers who anticipate owing at least $1,000 in taxes after considering withholding and credits. The IRS advises using past income, deductions, and credits as a baseline for calculating 2024’s estimated tax obligations. Tools such as the IRS Tax Withholding Estimator and Form 1040-ES provide step-by-step guidance to help taxpayers accurately figure their estimated taxes.
To facilitate timely payments, the IRS advocates for electronic submissions, which are secure and efficient. Taxpayers can utilize the IRS Direct Pay system or access their IRS Online Account to make payments directly from a checking or savings account. Alternatively, payments can be made via debit card, credit card, or digital wallet, though it’s important to note that payment processors, not the IRS, charge fees for these transactions.
The IRS warns that underpayment of taxes, whether through withholding or estimated payments, may result in penalties. Taxpayers can refer to Form 2210 to assess potential penalties or seek waivers under specific circumstances. Special considerations apply to certain groups, including farmers, fishermen, and those affected by unforeseen events.
For taxpayers in disaster-affected areas, the IRS provides automatic extensions for estimated tax payments. The deadlines for these individuals vary depending on their location and the nature of the disaster. For instance, residents in parts of Arkansas, Iowa, and other states have until November 1, 2024, while those in regions like Florida and Georgia have until February 3, 2025.
Additionally, the IRS draws attention to the importance of reporting all income, including that documented on Form 1099-K for payments received through third-party networks. The 1099-K, relevant to side hustles and online sales, is a reminder that income must be reported regardless of whether a form is received.
Looking ahead, the IRS notes that the final estimated tax payment for the 2024 tax year is due on January 15, 2025. As the agency continues to streamline its processes, taxpayers are encouraged to stay informed and proactive in managing their tax responsibilities.
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