The IRS tax filing deadline in September is fast approaching, but there’s some relief for individuals and businesses in disaster-affected areas. The IRS has granted an automatic extension for taxpayers living in specific regions impacted by natural disasters, meaning you might still have time to submit your estimated tax payment.
However, if you’re not in a designated disaster area, the September 16 deadline is key. If you’re self-employed, retired, or a business owner, it’s critical to know the implications of this date and the possible penalties if you miss it.
Who Is Affected?
For many taxpayers, September 16 is just another day, but for those without employer tax withholdings, it’s a crucial deadline for estimated tax payments. This group includes:
- Self-employed individuals
- Retirees with income outside of Social Security
- Investors
- Business owners and corporations
Since there’s no employer automatically withholding taxes for these individuals, they’re responsible for making quarterly estimated tax payments throughout the year. September 16 marks the third quarterly payment date, and missing it could lead to underpayment penalties.
Why Does This Matter?
Even if you’re due a refund come tax season, the IRS stresses that failing to make timely estimated tax payments can result in penalties. Here’s what the IRS says: “Late and skipped estimated tax payments can incur penalties even if a refund is due when a tax return is filed.” This means you can’t count on a future refund to avoid penalties for missed payments now.
If You Need to Pay
According to the IRS, estimated tax payments are required if:
- You expect to owe at least $1,000 in taxes for 2024 after subtracting any withholding and credits, and
- Your withholding and credits will be less than either:
- 90% of the tax shown on your 2024 tax return, or
- 100% of the tax shown on your 2023 return.
These rules help ensure that taxpayers are paying their fair share of taxes throughout the year rather than at the end. If you’re unsure about how much you should be paying, the IRS provides tools like their Tax Withholding Estimator on their website to help you calculate your estimated tax obligations.
Disaster Areas
For taxpayers living in areas recently declared as disaster zones, there’s good news. The IRS has automatically extended the tax deadlines for individuals and businesses in these regions, allowing them more time to file and make payments. As of September 5, these areas include parts of 17 states, Puerto Rico, and the Virgin Islands. Taxpayers in states such as Arkansas, Iowa, Mississippi, New Mexico, Oklahoma, Texas, and West Virginia now have until November to make their estimated tax payments.
The exact deadlines may vary depending on the extent of the damage and the state in question, so it’s important to check with the IRS for specific information regarding your locality.
Steps to Avoid Penalties
To avoid penalties, taxpayers should make sure they stay on top of their quarterly payments. The IRS suggests using their online Tax Withholding Estimator to get an accurate picture of your tax liabilities and plan accordingly. If you’ve underpaid in earlier quarters, you might want to pay a little extra in the remaining installments to minimize penalties.
| Payment Date | What It Covers |
|---|---|
| April 15 | 1st quarter estimated tax payment |
| June 15 | 2nd quarter estimated tax payment |
| September 16 | 3rd quarter estimated tax payment |
| January 15 | 4th quarter estimated tax payment |
For those who missed the September 16 deadline, penalties could start adding up quickly, so paying attention to these quarterly deadlines is crucial.
IRS Resources for Help
The IRS has resources to assist taxpayers with their estimated payments and penalty avoidance strategies. You can visit the IRS website for detailed guidance or use their tax tools to estimate your withholding needs.
In short, if you’re self-employed, a retiree with non-withheld income, or a business owner, make sure the September 16 deadline is on your radar. Missing it could result in penalties that may be avoidable with proper planning. For taxpayers living in disaster-affected areas, check with the IRS to see if your deadline has been extended.
FAQs
Who needs to make estimated tax payments?
Self-employed individuals, retirees, investors, and business owners typically need to make estimated payments.
What happens if I miss the September 16 deadline?
You may face penalties for underpayment, even if you’re due a refund.
How can I estimate my tax payments?
Use the IRS Tax Withholding Estimator for accurate calculations.
Who qualifies for extended deadlines?
Taxpayers in federally declared disaster areas across 17 states, Puerto Rico, and the Virgin Islands.
What is the penalty for underpaying taxes?
The penalty is calculated based on how much and how late your payments are.
