Reminder: 2024 Second Quarter Estimated Tax Payment Deadline is June 17

The IRS is reminding taxpayers who need to make estimated tax payments that the 2024 second quarter estimated tax deadline is June 17. (IR 2024-161, 6/10/2024)

Pay-as-you-go.

The US has a pay-as-you-go system so taxes must be paid as income is earned during the year. There are two ways for taxpayers to make pay-as-you-go payments:

1. Withholding from pay, pension, or certain government payments, such as Social Security.
2. Making quarterly estimated tax payments throughout the year.

Who needs to make estimated tax payments.

Generally, individuals who have income that is not subject to tax withholding (such as the self-employed) must make estimated tax payments if they expect to have a tax liability of $1,000 or more when they file their return. In addition, individuals who don’t have enough tax withheld from their income may also need to make estimated tax payments to avoid penalties.

Note. Generally, corporations that expect to owe tax of $500 or more must make estimated tax payments.

Gig workers.

Individuals working a full or part-time gig or who have a “side hustle” like driving for a ride share company or selling things on the internet must report their income from their gigs. And while earnings from these jobs may be reported to the IRS on a Form W-2, Wage and Tax Statement, or a 1099 series form, income must be reported even if not reported to the IRS at all.

Note. Recipients of an Form 1099, including a Form 1099-K, Payment Card and Third Party Network Transactions, must use it with other tax records to determine gross income.

Making estimated tax payments.

The IRS encourages taxpayers to make their estimated tax payments electronically. Individuals can use their Online Account or IRS Direct Pay to make a payment using a checking or savings account.

Note. A credit/debit card or digital wallet can also be used to make estimated tax payments, but a fee is imposed by the payment processor.

The Electronic Federal Tax Payment System (EFTPS) can also be used to make an estimated payment. Payment by check or money order made payable to the “United States Treasury” is accepted.

Note. Corporations must use electronic funds transfer to make all federal tax deposits, for example deposits of employment, excise, and corporate income tax. Installment payments of estimated tax must also be made via this method. Usually, an electronic funds transfer is made via the EFTPS.

For more information about the penalty for underpayment of estimated tax, see Checkpoint’s Federal Tax Coordinator ¶ S-5260.