Q2 Estimated Taxes Due Today!

Audio version available here (2 min.)

Attention! Estimated taxes for the second quarter of 2024 are due TODAY, Monday, June 17th. This deadline applies to any taxpayer not currently subject to tax withholding. This includes freelancers, retired individuals, business owners, corporations, and anyone else who does not have taxes taken out when they are paid.

As a general rule, self-employed individuals (freelancers) typically do not have taxes withheld when their client pays them in exchange for their services. As such, most freelancers will need to pay estimated taxes every quarter so that they do not face a huge tax bill on April 15th.

If you are an employee on your company’s payroll, chances are you have taxes withheld on every paycheck you receive. However, if you are uncertain that enough taxes are being withheld, or if you expect to owe more than $1000 in taxes on your annual tax return, and you already know that not enough taxes are being withheld on each paycheck to meet at least 90% this balance, you can submit a new Form W-4 to amend the amount of taxes withheld.

Business owners of sole proprietorships, partnerships, and S corporation shareholders also should adhere to the $1000 balance rule. Meanwhile, corporations who expect to owe at least $500 on their annual tax return should make estimated payments every quarter.

Why should you pay estimated taxes? Mainly, failure to pay estimated taxes could result in underpayment penalties and a high tax bill on April 15th. To avoid this, the best practice is to make punctual payments every quarter.

As a reminder, today’s deadline is for Q2. The previous deadline for Q1 was April 15th. The next deadline for Q3 is September 16th, and the deadline for Q4 is January 15th of 2025.

To calculate and pay your estimated tax balance, use Form 1040-ES. If you are unsure of how to calculate your estimated tax balance, the IRS has a Tax Withholding Calculator to assist you. For more personalized advice, reach out to XQ CPA’s tax team. We would be happy to help you.

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Sources:

https://www.irs.gov/newsroom/irs-reminder-june-17-estimated-tax-payment-deadline-fast-approaching