Estimated Tax Payments Due Sept. 16 for Affected Areas

The IRS has issued an alert regarding estimated tax payments due on September 16, emphasizing the importance of timely payments to avoid penalties. Taxpayers, particularly those in disaster-affected areas, are granted extensions, with specific deadlines varying by location. For instance, individuals in Arkansas, Iowa, Mississippi, New Mexico, Oklahoma, Texas, and West Virginia have until November 1, while those in Florida, Georgia, and several other states have until February 3, 2025. The IRS warns that underpayment of estimated taxes can lead to penalties, which accrue at a rate of 0.5 percent per month on unpaid taxes, with a maximum penalty of 25 percent. This is particularly relevant for gig workers, sole proprietors, and others who may not have sufficient withholding from their paychecks. To mitigate this risk, taxpayers are encouraged to utilize the IRS’s Tax Withholding Estimator to ensure adequate withholding. In addition to estimated payments, the IRS reminds taxpayers to report all income, including amounts received through payment apps and online marketplaces, as they may receive Form 1099-K. This form is crucial for reporting income accurately, regardless of whether it is reported by third parties. For those unable to pay their taxes in full, the IRS offers options to pay what they can while applying for a payment plan, allowing for monthly installments if approved. This flexibility aims to assist taxpayers in managing their tax obligations effectively, especially during challenging financial times.