Tax Day signifies a payment due date for more than just individual’s income tax returns. The Internal Revenue Service (IRS) also expects payment of the first quarterly tax payment for 2019 on April 15.
What are quarterly tax payments? The IRS often requires quarterly tax payments for taxpayers who do not have withholdings taken out of paychecks throughout the year. The IRS states the most common taxpayers that are required to file quarterly tax payments include the self-employed, investors and retirees.
It is important to note the Tax Cuts and Jobs Act changed the way tax obligations are calculated. As a result, taxpayers may need to change the way they determine their quarterly tax payments.
Who needs to pay an estimated tax payment? In most cases, the IRS requires estimated tax payments from those who do not withhold tax payments throughout the year, as noted above. The IRS goes on to provide some additional guidance. This includes:
- Sizable tax bill. The agency expects payment from taxpayers who anticipate they will owe at least $1,000 in tax obligations.
- Even those with withholdings may need to pay. The IRS also expects payment if a taxpayer’s withholdings are not sufficient to cover at least 90 percent of their 2019 tax obligations.
How do taxpayers make quarterly payments? Taxpayers can either file electronically or through a mailing. Those who choose to pay electronically can use either the IRS’ Direct Pay link or the Treasury Department’s Electronic Federal Tax Payment System.
How do taxpayers estimate their payment? The IRS recommends taxpayers have a copy of their 2018 tax returns as well as a 2019 Form 1040-ES (Estimated Tax for Individuals) to determine their estimated tax payment for the first quarter of 2019.