2021 Estimated Tax Due Dates
Why It Is Important to Know the 2021 Estimated Tax Due Dates
It is important for businesses and individuals to know the estimated tax due dates for 2021 in order to stay compliant with the law and avoid costly penalties. Knowing and understanding the estimated tax due dates can help business owners and individuals plan ahead and ensure they are paying their taxes on time. The estimated tax due dates also provide a timeline for businesses and individuals to plan and budget their finances in order to pay their taxes on time.
Estimated Tax Due Dates for 2021
The estimated tax due dates for 2021 are as follows: The first estimated tax payment for 2021 will be due on April 15, 2021. The second estimated tax payment for 2021 will be due on June 15, 2021. The third estimated tax payment for 2021 will be due on September 15, 2021. The fourth and final estimated tax payment for 2021 will be due on January 15, 2022.
How to Calculate Your Estimated Tax
Calculating your estimated tax is relatively easy. All you need is a copy of your most recent tax return. Look at the income and tax liability figures on your tax return and use those figures to estimate your income and tax liability for the current year. Then, use the IRS's estimated tax worksheet to calculate the amount of estimated tax you need to pay. Be sure to check the IRS website for the most up-to-date information and instructions.
Who Needs to Pay Estimated Tax?
Individuals who expect to owe at least $1,000 in taxes on their federal income tax return for the year, after subtracting their withholding and refundable credits, must pay estimated tax. This includes self-employed individuals, certain small business owners, and investors. Individuals who receive most of their income from wages, salaries, tips, and other taxable employee compensation, and who have taxes withheld from those wages, typically do not need to pay estimated tax.
Penalties for Not Paying Estimated Tax
If you fail to pay your estimated taxes on time or if you don't pay enough taxes, you may be subject to penalties and interest. The penalty for not paying your estimated taxes on time is usually equal to the amount of interest you would have paid if you had paid your estimated taxes on time. The penalty for not paying enough taxes is usually a percentage of the amount of taxes you owe. The IRS will also assess an additional penalty if your estimated taxes are more than 60 days late.
Ways to Pay Your Estimated Tax
There are several ways to pay your estimated tax. You can pay by mail, online, or through your bank or financial institution. You can also pay your estimated taxes with a credit card, but be aware that there may be additional fees or interest associated with this option. You can also choose to make estimated tax payments in one lump sum or in four equal payments throughout the year.
Filing Your Estimated Tax Return
In addition to paying your estimated taxes, you must also file an estimated tax return. This return must be filed on or before the due date for the first estimated payment. You can file your estimated tax return on paper or electronically. You must include your Social Security Number or Individual Taxpayer Identification Number, the total amount of estimated tax you are paying, and the total amount of taxes you owe for the year. You must also include a copy of your tax return from the previous year.
Conclusion
It is important to be aware of the 2021 estimated tax due dates and to pay your estimated taxes on time in order to avoid penalties and interest. Knowing the estimated tax due dates can also help you plan and budget your finances in order to pay your taxes on time. If you need more information or assistance with calculating or paying your estimated taxes, contact a tax professional or the IRS.