IRS Reminder: Third Estimated Tax Payment Due September 16, 2024

TL;DR: The IRS reminds taxpayers that the third estimated tax payment for 2024 is due on September 16, 2024. For individuals who owe more than $1,000 in taxes that aren’t withheld from their income, such as self-employed workers, retirees, and investors, making these quarterly payments This guide explains who qualifies, the rules that apply, and how to apply them to your situation.

The IRS reminds taxpayers that the third estimated tax payment for 2024 is due on September 16, 2024. For individuals who owe more than $1,000 in taxes that aren’t withheld from their income, such as self-employed workers, retirees, and investors, making these quarterly payments is crucial to avoid penalties. However, taxpayers in certain disaster-affected areas will have more time to submit their payments, thanks to special extensions granted by the IRS.

Understanding Estimated Tax Payments

Estimated tax payments are required for people who receive income that doesn’t have taxes automatically withheld, including self-employment earnings, rental income, interest, dividends, and more. These taxpayers are responsible for paying the IRS quarterly, which helps them stay on top of their tax obligations throughout the year. By dividing the tax payments into four, the IRS ensures that taxpayers avoid a lump sum payment at the end of the year, which can be financially burdensome.

Failing to make these payments can result in underpayment penalties. To avoid these fees, taxpayers must pay at least 90% of the total tax due for the year or 100% of the tax paid in the previous year (if the taxpayer’s adjusted gross income is under $150,000).

What Happens If You Miss a Payment?

If you miss an estimated tax payment, the IRS may impose penalties on the unpaid amount. However, certain circumstances, like facing financial hardship, could lessen or eliminate penalties. For disaster-area taxpayers, the situation is different. Depending on where they reside, they could qualify for extensions on both estimated tax payments and other tax-related deadlines.

Extended Deadlines for Disaster-Affected Taxpayers

For taxpayers living in disaster-affected areas, the IRS offers deadline extensions to help alleviate financial pressure during tough times. For instance, areas impacted by hurricanes, wildfires, or other significant events may qualify for more time to meet their tax obligations. These extensions vary by location, with some deadlines extended to as late as February 3, 2025.

States with federally declared disaster areas eligible for these extensions include parts of Florida, Arkansas, Texas, and Puerto Rico. Taxpayers should verify their eligibility by checking the IRS disaster relief page. Here, they can find specific information on which counties are covered and how long their extensions last.

How to Calculate Your Estimated Tax Payments

Calculating your estimated tax payments involves estimating your adjusted gross income, taxable income, taxes, deductions, and credits for the year. You can use IRS Form 1040-ES to help with this calculation. This form provides the necessary worksheets and instructions to ensure you’re paying the correct amount each quarter.

Additionally, many tax preparation software programs include features to help taxpayers calculate their estimated tax payments. These tools simplify the process, making it easier to manage the quarterly payments accurately.

How to Make Estimated Payments

There are multiple ways to make your estimated tax payments:

• IRS Direct Pay: Allows you to pay directly from your bank account with no fees.
• Electronic Federal Tax Payment System (EFTPS): A free service from the U.S. Department of the Treasury.
• Debit or Credit Card Payments: Available through approved IRS payment processors, though they may involve additional fees.
• Check or Money Order: Mail your payment using the payment voucher included in Form 1040-ES.

The IRS strongly encourages electronic payments for speed, security, and accuracy.

Why You Should Stay on Top of Deadlines

Staying up to date with your estimated tax payments ensures that you won’t face penalties or interest charges from the IRS. It also helps you manage your cash flow better throughout the year. Paying quarterly, rather than all at once, can prevent a large, unmanageable bill when it’s time to file your taxes.

For taxpayers in disaster areas, these deadline extensions provide some relief, but it’s still important to keep track of the new due dates to avoid future issues. The IRS works to ensure that individuals affected by natural disasters have ample time to recover and focus on their financial responsibilities at a later date. Always check the latest information on IRS.gov to confirm your deadlines.

Final Tips for Taxpayers

To avoid any confusion, here are some tips for staying on track with estimated tax payments:

• Mark your calendar: Stay ahead of the deadlines by marking them down in your schedule or using reminder apps.
• Use tax software: Many software options help you calculate your