The fourth-quarter estimated tax deadline is Jan. 16, and you could have a surprise bill or owe a penalty if you don't send a payment, according to the IRS.
While many employers withhold levies from every paycheck, other income — such as freelancing, small business or investment earnings — requires a separate payment to the IRS.
Generally, you must make quarterly estimated payments for this income if you expect 2023 tax liability of $1,000 or more.
In December, the IRS reminded such taxpayers to make a fourth-quarter tax payment on or before Jan. 16 "to avoid a possible penalty or tax bill when filing in 2024."
If you miss the estimated tax payment deadline, you may trigger an interest-based penalty based on the current interest rate and amount that should have been paid, which compounds daily.
Persons:
Biden, Tom Wheelwright
Organizations:
IRS, Finance