Estimated Taxes Explained
Self-employed and small business owners, add these dates to your calendar to avoid any tax penalties.
Estimated tax payments are usually paid on a quarterly basis to the Internal Revenue Service (IRS) when income is not subject to withholding taxes through a salary from an employer.
According to IRS, individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe taxes of $1,000 or more when their federal tax return is filed.
Corporations generally have to make estimated tax payments if they expect to owe taxes of $500 or more when they file their federal tax return.
What are the filing dates for federal quarterly estimated tax payments?
For the period January 1 - March 31, 2021 - April 15, 2021
For the period April 1 - May 31, 2021 - June 15, 2021
For the period June 1 - August 31, 2021 - September 15, 2021
For the period September 1 - December 31, 2021 - January 15, 2022
How does the IRS collect quarterly estimated payments?
Three ways to pay your 2021 quarterly estimated tax payments:
Fill out IRS Tax Form 1040-ES and drop it in the mail
Go online to IRS.GOV
Download the IRS2Go app on your mobile device.
Note: If you underpay taxes, either through withholding or estimated tax payments, you will have to pay a penalty. Most people avoid this by:
Owing less than $1,000 after subtracting withholdings and credits, or
Paying at least 90% of your current year tax liability or 100% of last year’s liability (whichever amount is smaller)
If you are worried about meeting the requirements or don’t have the time to calculate payments, consider a free consultation from a professional.
