US IRS: September 16 Deadline for Third-Quarter Estimated Tax Payments

| Image Credits: "IRS 1040 Tax Form Being Filled Out" by kenteegardin is licensed under CC BY-SA 2.0.

As the third quarter of 2024 comes to a close, the IRS has issued a critical reminder for millions of taxpayers across the U.S.: the deadline for estimated tax payments is September 16, 2024. This deadline applies to those who receive income not subject to automatic tax withholding—such as the self-employed, retirees, gig workers, investors, and business owners. Estimated taxes, also known as "pay-as-you-go" taxes, are designed to ensure that taxes are paid throughout the year on income that doesn’t have federal tax withheld.

WHO NEEDS TO PAY BY SEPTEMBER 16?

The IRS requires estimated tax payments from taxpayers who expect to owe at least $1,000 in taxes for 2024 after accounting for withholding and credits. Additionally, taxpayers must ensure their withholding and credits are less than either:

• 90% of the total tax shown on their 2024 return, or

• 100% of the tax shown on their 2023 return if it covered a full 12-month period.

Non-compliance with estimated tax payments can result in penalties, even if a refund is due when the final return is filed.

WHY ESTIMATED TAX PAYMENTS ARE CRITICAL

Income that is not subject to withholding, such as income from self-employment, interest, dividends, and capital gains, must be reported and paid quarterly. The IRS breaks these payments into four quarters to prevent taxpayers from facing a large lump sum at the end of the year. By paying quarterly, individuals can spread the burden and avoid underpayment penalties.

For 2024, the quarterly deadlines are:

• April 15

• June 17

• September 16

• January 15, 2025

If you miss these deadlines or underpay, penalties may be applied, regardless of whether your final tax return shows a refund.

RELIEF FOR DISASTER-AFFECTED AREAS

For taxpayers affected by federally declared disasters, the IRS offers some relief. Individuals and businesses in impacted areas, including parts of Florida, Texas, and Puerto Rico, may qualify for extensions on their estimated tax deadlines, with some deadlines pushed as far back as February 3, 2025. Taxpayers in these areas should check the IRS website for detailed information on qualifying regions and deadlines.

HOW TO PAY YOUR ESTIMATED TAXES

The IRS encourages taxpayers to pay electronically through Direct Pay or the Electronic Federal Tax Payment System (EFTPS). These options are secure, fast, and eliminate the risk of mailing delays. Taxpayers can also pay using debit or credit cards, though processing fees may apply. Traditional methods, like sending a check or money order with a payment voucher, remain an option.

STAYING AHEAD OF TAX DEADLINES

Keeping up with quarterly payments can save taxpayers from unexpected liabilities at year-end. For those who need assistance calculating their estimated taxes, the IRS offers helpful resources like Form 1040-ES, which provides worksheets and instructions to guide you through the process. Tax preparation software also helps simplify the calculation and submission of payments.

The IRS continues to emphasize the importance of making timely estimated tax payments, especially for those with varying income streams that aren't automatically taxed.

SOURCE/ RECOMMENDED READ: 

• IRS reminder: Third estimated tax payment due Sept. 16; disaster-area taxpayers have more time