What taxpayers need to know about making 2022 estimated tax payments
What taxpayers need to know about making 2022 estimated tax payments
Everyone must pay tax as they earn income.
Must pay at least 90% of their taxes throughout the year through withholding, estimated or additional tax payments. If they don't, may owe an estimated tax penalty.
Some taxpayers who earn income not subject to withholding usually make quarterly estimated tax payments.
Here are some key things to help taxpayers determine if they need to make estimated tax payments:
Make estimated tax payments if they expect to owe tax of $1,000 or more, after adjusting for any withholding. Corporations must make these payments if they expect to owe $500 or more.
The taxpayer needs to check tax withholding using the Tax Withholding Estimator on IRS.gov. If it suggests a change, submit a new Form W-4 PDF to their employer.
Aside from business owners and self-employed individuals, sole proprietors, partners and S corporation shareholders are also required to make estimated tax payments.
Aside from income tax, taxpayers can pay other taxes like self-employment tax and the alternative minimum tax.
Deadlines for paying the 2022 quarterly estimated tax are March 15, June 15, September 15, and January 17, 2023.
Taxpayers can pay by using Form 1040-ES (Estimated Tax for Individuals) or Form 1120-W (Estimated Tax for Corporations).
Taxpayers can pay estimated taxes by following
Direct Pay from a bank account.
Paying by credit or with debit card or the Electronic Federal Tax Payment System.
Mailing a check or money order to the IRS.
Paying cash at a retail partner.
Anyone who pays too little tax through withholding, or estimated tax payments may owe a penalty.
In some cases, the penalty may apply if their estimated tax payments are late.
The penalty may apply even if the taxpayer is due a refund.