The Importance of Meeting Estimated Tax Payment Deadlines

January 14, 2025
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The next estimated tax payment deadline for is tomorrow, January 15, 2025. This is your final chance to make an estimated tax payment for the 2024 tax year. Missing this crucial deadline can lead to non-deductible penalties, which means you’ll pay more without gaining any tax benefit. Fortunately, the IRS offers secure and convenient payment methods such as IRS Direct Pay and EFTPS (Electronic Federal Tax Payment System) to help you meet your obligations on time.

Here’s what you need to know about staying compliant and avoiding penalties:

Understanding Estimated Tax Payment Due Dates

For taxpayers who owe estimated taxes, staying on top of deadlines is essential. The IRS has set specific payment dates each year to spread out tax obligations evenly across each quarter.

2025 Tax Year Deadlines:

  • April 15, 2025
  • June 16, 2025
  • September 15, 2025
  • January 15, 2026.

Mark these dates on your calendar to avoid falling behind.

How to Avoid Penalties

To steer clear of penalties, the IRS requires you to pay:

  • At least 90 percent of your current year’s tax liability, or
  • 100 percent of your prior year’s tax liability (increased to 110 percent if your adjusted gross income (AGI) exceeds $150,000).

These thresholds are designed to ensure taxpayers make sufficient payments throughout the year to cover their obligations.

Special Considerations for Uneven Income

If your income varies significantly throughout the year—such as for freelancers, contractors or seasonal workers—you can use the annualized income installment method. This approach aligns your estimated payments with actual earnings, helping you avoid overpaying during slower months.

Catching Up on Missed Payments

If you’ve missed a deadline, catching up as soon as possible can stop penalties from accruing further. However, it’s important to note that penalties already assessed for late payments cannot be forgiven simply by catching up. Timely payments moving forward are the best way to minimize financial consequences.

Secure Your Payment Today

The IRS provides two convenient tools for submitting estimated tax payments:

  • IRS Direct Pay: Ideal for quick and secure payments directly from your bank account.
  • EFTPS: A free service to schedule and manage all your federal tax payments.

Both options help ensure that your payment is processed securely and on time.

Have Questions About Estimated Tax Payments?

Navigating estimated taxes can be tricky, especially if your income fluctuates or you’re unsure of your obligations. If you’d like to discuss your situation, please contact Illumination Wealth for help with all your tax planning needs.

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