IRS Reminder September 15 Deadline for Tax Payments

IRS Reminder September 15 Deadline for Tax Payments.With September 15 quickly approaching, individuals who do not have taxes automatically withheld from their income are reminded to make a payment to the IRS. While many employers deduct taxes from each paycheck, individuals such as freelancers, self-employed workers, small business owners, and investors are responsible for making quarterly estimated tax payments.

The Importance of Quarterly Estimated Payments

In most cases, individuals expecting an annual tax liability of $1,000 or more are required to make quarterly estimated tax payments. Recently, the IRS emphasized that these payments are crucial to “avoid a surprise at tax time.

” Sean Lovison, a certified financial planner and CPA from WJL Financial Advisors, stressed the importance of these payments for maintaining financial stability throughout the year.

Ensuring Accurate Payments and Compliance

To ensure compliance with tax regulations and avoid penalties, it’s essential to accurately calculate and make tax payments on time. Meeting the “safe harbor” rule is another strategy recommended by Lovison to prevent underpayment penalties.

Additionally, maintaining thorough records, monitoring your tax situation, and seeking professional guidance can contribute to a smooth tax experience.

Avoiding Penalties in the ‘Pay-As-You-Go’ System

The U.S. tax system operates on a “pay-as-you-go” basis, making it imperative to stay current with tax payments. CFP Kathleen Kenealy, founder of Katapult Financial Planning, warns that missing any of the four estimated tax payment deadlines for 2023 (April 18, June 15, Sept. 15, or Jan. 16, 2024) can result in penalties. Late payments can incur a penalty of 0.5% of the unpaid balance per month or partial month, up to 25%, in addition to interest.