This occurs in 2022, when Jan. 15 falls on a Saturday, followed by Martin Luther King Jr. So the tax deadline for income earned in the fourth quarter of 2021 is Tuesday, Jan. 18, 2022. The IRS, however, offers safe harbor guidelines to help you avoid underpayment penalties.

These include paying through your IRS Online Account, paying by check, paying over the phone, paying by credit card, or paying through an online banking portal. There is even a mobile application called IRS2Go with its own payment options. Ideally, the IRS would like to get your estimated taxes in four estimated tax equal payments over the course of the year, but some businesses are seasonal. For example, a landscaping business makes most of its money during the warmer months of the year. In this event, you’d follow the annualized income installment method that enables you to pay when you’re flush with cash.

Basics of estimated taxes for individuals

Check your state tax department’s website for details, as state deadlines and rules may differ from federal ones. When you file your annual tax return, you can apply any overpayment from the previous year to your estimated payments for the current year. We’ll make it easy for you to figure out if you have to pay estimated taxes and if so, how much. Note that you may need to pay estimated taxes for your state as well.

She then subtracts any above-the-line deductions she thinks she’ll incur for the year. Don’t forget to check if you’ve applied your previous year’s tax refund to this year’s taxes. Bankrate.com is an independent, advertising-supported publisher and comparison service.

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According to the IRS, you don’t have to make estimated tax payments if you’re a U.S. citizen or resident alien who owed no taxes for the previous full tax year. And you probably don’t have to pay estimated taxes unless you have untaxed income. The IRS can penalize individuals and corporations who don’t file quarterly taxes on due dates.

The “safe harbor” rule of estimated tax payments

If you think that you will owe money when you file your next year’s taxes, one easy way to get a jump on paying your bill is to apply your tax refund to your next year’s taxes. If you won’t have federal income tax withheld from wages, or if you have other income and your withholding will not be enough to cover your tax bill, you probably need to make quarterly estimated tax payments. Having all or part of your overpayment applied to your estimated taxes is a relatively painless way to take care of at least some of what you owe for coming year.

Employees have their income, Social Security and Medicare taxes withheld by their employers and paid the IRS quarterly or monthly. Withholding also includes business owners who have formed corporations to own and operate their businesses. For this method, you’ll need to forecast your income and tax deductions for the year, and then calculate your tax obligation. You’ll want to ensure you’re paying at least 90% of the tax you expect to owe. Employees have taxes withheld from their paychecks, but individuals like independent contractors need to make quarterly payments.