Freelancers, solopreneurs, small business owners and other self-employed people face a unique set of challenges – especially when managing their taxes. Unlike employees whose employers handle tax withholdings, self-employed people must make estimated tax payments four times throughout the year. You should understand this year’s tax deadlines to avoid penalties and stay in good standing with the IRS.

Understanding Estimated Taxes

The IRS uses estimated taxes to collect income tax and self-employment tax from people who do not have their taxes automatically withheld from their pay. These taxpayers must make quarterly estimated tax payments to cover their annual tax liability.

Here’s when the quarterly payments are due.

• First quarter: April 15
• Second quarter: June 15
• Third quarter: Sept. 15
• Fourth quarter: Jan 15 (of the following year)

These tax deadlines move to the next business day if the dates fall on a weekend or federal holiday.

Penalties for Missing Tax Deadlines

Failing to meet these deadlines can result in penalties for underpayment. The IRS calculates penalties based on the amount of unpaid tax and how long it remains unpaid. To avoid these penalties, ensure that you’re paying at least 90% of your current year’s tax liability or 100% of the tax shown on your previous year’s tax return (110% if your adjusted gross income was more than $150,000).

If you cannot file your income tax return by the April deadline, you can request an extension using Form 4868, which gives you until Oct. 15. However, it’s crucial to understand that an extension to file is not an extension to pay. You must still pay all the taxes you owe by the original April deadline to avoid penalties and interest.

Those who miss an income tax filing deadline without requesting an extension must file and pay as quickly as possible to limit penalty and interest charges.

Let Clear View Business SolutionS Help

Tax deadlines and payments can be daunting, especially when balancing the demands of gig work, freelancing or entrepreneurship. At Clear View Business Solutions, our experienced team specializes in helping self-employed professionals and small business owners manage their taxes efficiently. From making estimated quarterly payments to filing annual returns and requesting extensions, we offer expert advice to ensure you meet your tax obligations without stress.

Remember, staying ahead of tax deadlines is more than avoiding penalties; it’s about maintaining your financial health and peace of mind. Reach out to us for personalized advice and support and make this tax year your smoothest yet.