If you are self-employed or have no automatic withholding tax claim from your source of personal taxable income, then you must pay the IRS periodically by making estimates of your income tax payments. From now on, IRS wants a reduction in your income when you earn. For employees, the government is paid by the withholding tax every time you get a salary (whichever amount is based on your W-4). Retirees can have taxes withheld from Social Security payments and pension distributions or tax removed from a required minimum distribution. However, if you are self-employed or do not have taxes withheld automatically from your other sources of taxable income (such as interest, dividends, or capital gains), then you can decide for yourself to pay periodically the IRS by making estimated tax payments. For this reason, here are some things about tax quarterly payment dates you should notice.
Calculate your estimated tax payments
Use the available Form 1040-ES to calculate your own estimate of your current tax bill. Start by determining your adjusted gross income, taxable income, your taxes, your deductions and credits for the year – there is a worksheet to help you through the instructions in Form 1040-ES. You can also examine the tax return of your previous year to a general guide. The results that appear later are estimates of the income you earn during that year If your estimated tax bill is overestimated, then fill out another column of the 1040-ES spreadsheet to recalculate your estimated tax bill amount for the next payment. It’s no different that your estimated tax payment may be too low, try going to the 1040 ES spreadsheet again to readjust your next estimated tax bill. You should also recalculate if your personal situation changes or if there are tax law changes that may affect your tax liability for the year.
- No income until later in the year?
You are not required to make estimated tax payments until you have no income you need tax. For example, if you have not had taxable income before at least July 20, 2021, then you do not need to calculate your estimated tax bill that falls before September 15, 2021.At this point, you can pay all your estimated tax later than 15 September. Or you can pay in two installments before September 15 and January 18.
- Farmers and fishermen
If at least two-thirds of your gross income from agriculture or fishing, you can make one payment of the estimated tax for the 2021 tax year later than January 18, 2022. If you file a 2021 income statement at least before March 1, 2022 and have already paid the tax due on the payment tax bill during that period, then you no longer need to make an estimated tax payment.
- How to pay
Use Form 1040-ES to pay your estimated taxes. In this case there are several ways to pay the estimated tax that you can choose, ranging from payment by check, cash, money orders, credit cards and debit cards. There are also many online payment options, such as the federal Electronic Payment System (EFTPS). The technicalities of other payments have also been explained in the instructions on Form 1040-ES.