This ‘rule of thumb’ shows who needs to pay taxes by Sept. 16

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

This ‘rule of thumb’ shows who needs to pay taxes by Sept. 16

Aire Images | Moment | Getty Images

The third-quarter estimated tax deadline for 2024 is Sept. 16, and skipping a payment could

This is the hidden content, please

• Sign In
• or
• Sign Up

, according to the IRS.

Typically, you need estimated payments for any income without tax withholdings, such as earnings from self-employment, contract or gig economy work and investment or retirement income. 

Some filers also need estimated payments if they haven’t withheld enough taxes from a full-time or part-time job.  

Estimated payments can help avoid “refund disappointment or balance due shock,” said Mark Steber, chief tax information officer of Jackson Hewitt.

If you’re unsure, there’s a

This is the hidden content, please

• Sign In
• or
• Sign Up

for who should make a payment, the IRS outlined in a news release last week.   

More from Personal Finance:
Senate debates taxes ahead of Trump’s 2025 expirations
Momentum builds in Washington to eliminate certain Social Security rules
Here’s the deflation breakdown for August 2024 — in one chart

You should make estimated tax payments if you expect to owe at least $1,000 in taxes after subtracting your 2024 withholdings and tax credits or if you can’t meet so-called “safe harbor rules,” according to the IRS.

The safe harbor rules say you can avoid IRS penalties by paying at least 90% of your 2024 tax liability or 100% of 2023 taxes, whichever is smaller. You must meet these thresholds throughout the year.

That percentage jumps to 110% if your 2023 adjusted ****** income was $150,000 or higher. You can find adjusted ****** income on line 11 of 

This is the hidden content, please

• Sign In
• or
• Sign Up

 from your 2023 tax return.

How to avoid a ‘timing penalty’

“Many taxpayers incorrectly assume that if they are within the safe harbor limits they won’t have a tax payment penalty,” said certified financial planner and enrolled agent Tricia Rosen, founder of Access Financial Planning in Newburyport, Massachusetts.

Even with a refund, you can still incur a “timing penalty,” because the IRS requires tax payments on your income as it’s earned, she said.

For 2024, the quarterly estimated tax deadlines are April 15, June 17, Sept. 16 and  Jan. 15, 2025. Missing these deadlines can trigger an interest-based penalty based on the 

This is the hidden content, please

• Sign In
• or
• Sign Up

 and amount that should have been paid, which compounds daily.

Taxpayers impacted by

This is the hidden content, please

• Sign In
• or
• Sign Up

in 17 states, Puerto Rico and the ******* Islands may have extra time for third-quarter estimated payments, depending on their location, according to the IRS.    

The ‘easiest’ way to make tax payments

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

This is the hidden content, please

• Sign In
• or
• Sign Up

#rule #thumb #shows #pay #taxes #Sept

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up