When to Pay Estimated Taxes 2018
Estimated taxes are quarterly tax payments that individuals and businesses are required to make throughout the year. These payments are made to cover income taxes, self-employment taxes, and other taxes that are not withheld from regular paychecks. If you do not pay enough tax throughout the year, you may have to pay a penalty for underpayment of estimated taxes. It is important to understand when these payments are due to avoid penalties and ensure compliance with the tax laws.
1. When are estimated tax payments due for individuals?
For the tax year 2018, the estimated tax payments for individuals are due on April 17, June 15, September 17, and January 15 of the following year, if applicable.
2. Are estimated tax payments due on the same dates for businesses?
No, the due dates for estimated tax payments for businesses may vary depending on the type of business entity. Generally, partnerships and S corporations must make quarterly payments on the 15th day of the 4th, 6th, 9th, and 12th months of their fiscal year. C corporations have different requirements.
3. How do I calculate my estimated tax payments?
To calculate your estimated tax payments, you need to estimate your total income, deductions, credits, and taxes for the year. The IRS provides Form 1040-ES, which includes a worksheet to help you determine the amount of your estimated tax payments.
4. What happens if I don’t pay estimated taxes?
If you do not pay enough estimated taxes throughout the year, you may be subject to an underpayment penalty. The penalty is generally calculated based on the difference between the amount paid and the required payment.
5. Can I avoid the underpayment penalty?
Yes, you can avoid the underpayment penalty if you meet one of the following conditions: (1) you owe less than $1,000 in tax after subtracting your withholding and refundable credits, or (2) you paid at least 90% of the tax for the current year or 100% of the tax shown on the previous year’s return (whichever is smaller).
6. How do I make estimated tax payments?
You can make estimated tax payments electronically through the IRS’s Electronic Federal Tax Payment System (EFTPS) or by mail using Form 1040-ES. Some states also have their own methods for making estimated tax payments.
7. Can I adjust my estimated tax payments if my income changes?
Yes, if your income or deductions change during the year, you can adjust your estimated tax payments accordingly. You can use Form 1040-ES to recalculate your payments and submit the revised amounts.
8. What if I miss a payment deadline?
If you miss a payment deadline, you should still make the payment as soon as possible to minimize any potential penalties. If you cannot make the payment in full, it is better to make a partial payment rather than not making any payment at all.
In conclusion, paying estimated taxes is an important aspect of tax compliance for both individuals and businesses. By understanding the due dates, calculating the correct amounts, and making timely payments, you can avoid penalties and ensure that you meet your tax obligations throughout the year. If you have any specific questions or concerns about estimated tax payments, it is always recommended to consult with a tax professional or the IRS.