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What Happens If You Miss A Quarterly Estimated Tax Payment?

Quick, when’s the next date quarterly taxes are due? August 15? Or is it September 15? If you're self-employed, you're probably used to juggling all sorts of deadlines because you're running your own business. Maybe you're working on three different projects for three clients or juggling shifts between a rideshare app and a food delivery app with your work as a carpenter. Not to mention dating, helping the kids with their homework or just finding time to watch a single episode of something on Netflix. Inevitably, things slip through the cracks once in a while. Here's what happens when one of those things happens to be a quarterly tax payment, and you wind up with a penalty for late estimated tax payments. To avoid penalties, making your IRS estimated tax payment on time each quarter is crucial.

Table of contents

Wait, do I fully understand estimated taxes?...Read more

What happens if I missed a quarterly tax payment?...Read more

How much is the penalty for not paying quarterly taxes?...Read more

What if I'm late on estimated tax payment and filing my return?...Read more

Wait, do I fully understand estimated taxes?

Before we get to what happens when you miss estimated tax payments and the late penalties begin to roll in, let's make sure it's super clear how quarterly tax payments work and when quarterly taxes are due.

What is a quarterly estimated tax payment?

Who should be making IRS estimated tax payments?

How do I know how much to pay in quarterly estimated taxes?

How can a quarterly tax calculator help avoid penalties?

Quarterly tax dates 2023

Quarterly tax dates 2024

What happens if I missed a quarterly tax payment?

The gaps between quarterly taxes due dates vary, and the date each payment is due is not the same each month. With a weird schedule like that, it can be even easier to forget to pay. Or maybe you didn't forget to pay. Perhaps you had a huge car repair recently or the credit card bill was due, and you just don't have the cash at the moment. We've all been there at some point. Whatever the reason, if you missed a quarterly tax payment, what can be done? Step 1: Breathe Take a deep breath. Understand that this happens to other people from time to time, too, and you're not alone. You might be overwhelmed, and your first instinct might be to ignore the estimated tax payment late penalty the IRS is levying on you, but that's the worst course of action. Instead, do something now to address the damage done, because the penalty will only continue to grow. A tax pro can help you figure out how to pay quarterly taxes past the deadline. Step 2: Pay what you can When you're running a business, there are more business expenses than you can count, and many of them might seem more important than this one. But if you can pay something, anything, it will help. The IRS charges interest alongside the penalty for late estimated tax payments. If you can make partial payments, it will reduce the interest on the payments you owe. Get in touch with the IRS and ask for a payment plan, an option available to those who owe less than $50,000. If you can't pay everything now, this is the next best thing because, at least with a payment plan, you won't be surprised any further. Step 3: Work with the IRS Did we just say "work with the IRS?" Yes, contrary to popular belief, the IRS isn't out to get you, and even if it feels like it sometimes, their goal is not to ruin your day. They just want to collect the estimated tax payment late penalties owed to them, and they will work with you if they can help make that happen. After all, the IRS enforces the laws around taxes, and they have the power to waive fees. That's why it's worth talking to them. Show the IRS reasonable cause for missing a payment, and they will likely waive your penalty for not paying quarterly taxes. Even if they don't, their expectations will be absolutely clear to you, and maybe you can avoid another penalty for late estimated tax payments.

How much is the penalty for not paying quarterly taxes?

If you missed a quarterly tax payment, the IRS automatically charges you 0.5% of the amount that you didn't pay for each month that you don't pay, up to 25%. To find out how much you owe up to this point, you can use a tax penalty calculator. It can also tell you your IRS underpayment penalty, too, if you have one. If you eventually receive a notice from the IRS that they intend to seize your property, that 0.5% rate goes up to 1% per month. But, the penalty for late estimated tax payments goes down to 0.25% per month if you have a payment plan with the IRS (again, talk to them).

What if I'm late on estimated tax payment and filing my return?

If you miss a payment, the IRS imposes a penalty for not paying quarterly taxes on time. This estimated tax payment's late penalty is calculated based on the amount owed and the length of the delay. For 2024, quarterly tax payments are due on April 15, June 17, September 16, and January 15, 2025. If you miss any of these deadlines, the penalty starts accruing from the day after the due date. The IRS charges interest on the unpaid amount, so the longer you wait, the more you’ll owe. To avoid these penalties, it’s crucial to pay estimated taxes on time. If you realize you’re late, pay as soon as possible to minimize additional charges. You can easily pay estimated taxes online using the IRS Direct Pay system or the Electronic Federal Tax Payment System (EFTPS). If you’re also late filing your return, you could face additional penalties. The IRS can charge a failure-to-file penalty, which is typically 5% of the unpaid taxes for each month your return is late, up to 25%. FlyFin’s CPAs can help avoid penalties for not paying quarterly taxes by giving expert advice on making federal estimated tax payments. Self-employed individuals can also use the built-in estimated quarterly tax calculator to calculate their payments.

Common Mistakes to Avoid with IRS Quarterly Payments

Learn how to avoid common tax mistakes with IRS quarterly payments. Stay compliant, avoid penalties, and manage your self-employment taxes effectively.

Risks and Benefits of Paying Estimated Taxes All at Once

Explore the advantages and disadvantages of paying estimated taxes all at once. Learn how it impacts financial planning, cash flow, and potential penalties.

Estimated Taxes Filing

1099 workers have to pay estimated taxes if they owe over $1,000 in tax. Check out the 2024 quarterly tax dates and which IRS form is used to pay quarterly taxes.

Overpayment of Estimated Taxes

Overpaying on your taxes means you’ve given the IRS more than you owe. You need to notify the IRS to receive your tax refund.

Understanding Estimated Taxes

Learn how to calculate and pay estimated quarterly taxes to avoid penalties. Essential for self-employed individuals with non-withheld income.

Key IRS Quarterly Payment Dates for 2024

With our extensive reference to IRS quarterly payment dates for 2024, you can stay ahead of tax obligations. As a self-employed person, learn how to control your cash flow, stay out of trouble, and make your payments on time.

Methods to Make Quarterly Payments to the IRS

Learn the most effective methods for sending the IRS your quarterly payments. To make sure you pay your taxes on time, become knowledgeable about online payment choices, sending in payments, and setting up automated payments.

Tracking and Managing Your Quarterly Payments

Learn how to organize and manage quarterly estimated tax payments, track deadlines, and avoid penalties with tips on accurate record-keeping and accounting tools.

Quarterly Payments for Different Types of Income

Learn how to manage quarterly tax payments for various income streams, including business, investment, and passive income, while avoiding common pitfalls.

Common Mistakes to Avoid with IRS Quarterly Payments

Learn how to avoid common tax mistakes with IRS quarterly payments. Stay compliant, avoid penalties, and manage your self-employment taxes effectively.

Risks and Benefits of Paying Estimated Taxes All at Once

Explore the advantages and disadvantages of paying estimated taxes all at once. Learn how it impacts financial planning, cash flow, and potential penalties.

Estimated Taxes Filing

1099 workers have to pay estimated taxes if they owe over $1,000 in tax. Check out the 2024 quarterly tax dates and which IRS form is used to pay quarterly taxes.

Overpayment of Estimated Taxes

Overpaying on your taxes means you’ve given the IRS more than you owe. You need to notify the IRS to receive your tax refund.

What’s FlyFin?

FlyFin is the #1 A.I.-powered tax app for freelancers, gig workers, independent contractors and sole proprietors. For taxpayers who want to save more by itemizing their deductions, and get help with quarterly taxes, FlyFin tracks all their business expenses automatically using A.I. to find every possible tax write off and helps them be prepared for quarterly estimated taxes. Then, FlyFin's CPA team files a guaranteed 100% accurate tax return for you – to save you a couple of thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving more money on your taxes than last year, guaranteed.
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