The Internal Revenue Service today advised taxpayers, including self-employed individuals, retirees, investors, businesses, and corporations about the April 15 deadline for first-quarter estimated tax payments for tax year 2024.
Since income taxes are a pay-as-you-go process, the law requires individuals who do not have taxes withheld to pay taxes as income is received or earned throughout the year. Most people meet their tax obligations by having their taxes deducted from their paychecks, pension payments, Social Security benefits, or certain other government payments including unemployment compensation.
Generally, taxpayers who are self-employed or in the gig economy are required to make estimated tax payments. Likewise, retirees, investors, and others frequently need to make these payments because a significant portion of their income is not subject to withholding.
When estimating quarterly tax payments, taxpayers should include all forms of earned income, including part-time work, side jobs, or the sale of goods or services commonly reported on Form 1099-K.
Income such as interest, dividends, capital gains, alimony, and rental income is normally not subject to withholding. By making quarterly estimated tax payments, taxpayers can avoid penalties and uphold their tax responsibilities.
Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income, and victims of disasters are eligible for exceptions to penalties and special regulations.
