Estimated Tax Payments 2024 – Deadline, Amount and Complete Procedure!

The IRS requires estimated tax payments to cover income that isn’t subject to withholding throughout the year. So, the amount you’ll owe depends on how much income you expect to make in 2024 and the deductions you can claim.

Estimated Tax Payments 2024

Estimated tax payments are a crucial aspect of managing your tax obligations, especially for individuals with income sources beyond traditional employment.

In 2024, the IRS requires taxpayers to make quarterly estimated tax payments to ensure a smooth and timely fulfillment of their tax responsibilities. Individuals who work for companies typically have taxes withheld from their paychecks.

Individuals Required to Make Estimated Tax Payments in 2024

The main categories of people who typically need to make estimated tax payments are:

  • If you run your own business or work freelance, you are responsible for paying estimated taxes. 
  • Sole proprietors, partners, and S corporation shareholders generally need to make estimated tax payments if they expect to owe taxes of $1,000 or more when their return is filed.
  • If you have significant income that isn’t subject to withholding, such as:
    • Interest income: Earned from savings accounts, bonds, or certificates of deposit.
    • Dividends: Payments distributed by companies to their shareholders.
    • Capital gains: Profits earned from selling assets like stocks or real estate (held for more than one year).
    • Rental income: Income received from renting out property.
    • Royalties: Payments received for creative works like books, music, or patents.
  • Since these aren’t automatically taxed at the source, you might need to make estimated payments to avoid penalties come filing season.
  • If you have a side hustle that generates income beyond your primary job, you might need to make estimated payments depending on the amount earned.
  • Even if you weren’t required to make estimated payments in 2023, you might need to in 2024. Review your 2023 tax return to see if you owed more than $1,000 in taxes after withholding. 
  • If you typically receive a large tax refund and want to reduce your estimated tax burden, you can adjust the withholding on your W-2 wages. 
  • If you’re a W-2 employee with minimal income beyond your wages and have enough withheld throughout the year to cover your tax liability, you likely won’t need to make estimated payments.
  • Farmers and Fishermen: If at least two-thirds of your income comes from farming or fishing, you only have one estimated tax payment due in 2025.

2024 Estimated Tax Payment Deadlines

The estimated tax payment deadlines for 2024 follow a quarterly schedule, with adjustments for weekends and holidays:

  • April 15, 2024: This covers the tax liability from January 1st to March 31st, 2024.
  • June 17, 2024 (Monday): This covers the tax liability from April 1st to May 31st, 2024.  Note: The original due date of June 15th falls on a Saturday, so it’s pushed to the following business day.
  • September 16, 2024 (Monday): This covers the tax liability from June 1st to August 31st, 2024.  Note: The original due date of September 15th falls on a Sunday, so it’s pushed to the following business day.
  • January 15, 2025: This is the final payment for the 2024 tax year and covers the tax liability from September 1st to December 31st, 2024.

Making Estimated Tax Payment  2024

There are several ways to make estimated tax payments online, but the most common method is through the IRS website:

  • Head to the IRS Direct Pay website at https://www.irs.gov/payments/direct-pay
  • Select “Pay Your Individual Income Tax”.
  • Fill in the required fields, including your Social Security Number (SSN) or EIN, estimated tax payment amount, and the tax period (quarter) you’re paying for.
  • Select your preferred payment method from the available options, such as checking account, debit card, or credit card (note that credit card payments may incur processing fees).
  • Carefully review all the information you entered to ensure accuracy. Once confirmed, submit your payment.

How Much Should You Pay in Estimated Taxes?

The amount depends on your individual tax situation, including:

  • Income: The amount of income you expect to earn in 2024 from all sources (wages, self-employment, investments, etc.).
  • Deductions: The deductions you can claim to reduce your taxable income.
  • Tax Credits: Any tax credits you qualify for, which can further reduce your tax liability.
  • Use Form 1040-ES: The IRS offers Form 1040-ES which guides you through calculating your estimated tax liability.
  • Higher Income Taxpayers: There’s a special rule for taxpayers with higher adjusted gross income (AGI).
    • If your AGI in 2023 exceeded $150,000 (or $75,000 for married filing separately), 
    • you might need to pay 110% of your prior year’s tax liability instead of the standard 100%. Refer to Form 1040-ES for details on this rule.

Visit the NCBLPC Homepage To Get Relevant  Topics.

Leave a Comment