Here’s how taxpayers can pay the right amount of tax throughout the year

June 8, 2021

Federal taxes are pay-as-you-go. This means that people need to pay most of their tax during the year, as they earn income. This can be done either through withholding or estimated tax payments.

If the amount of income tax withheld from a taxpayer’s salary or pension is not enough, or they receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, they may need to make estimated tax payments. Self-employed taxpayers may also need to make estimated tax payments.

Adjust 2021 withholding
All taxpayers should review their federal withholding each year to make sure they’re not having too little or too much tax withheld.

Employees, retirees and self-employed individuals can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users, step-by-step through the process of checking their withholding, and provides withholding recommendations to help aim for their desired refund amount when they file next year. Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Employee’s Withholding Certificate.

Make 2021 estimated tax payments
Estimated payments are another way for taxpayers to pay what they owe in separate quarterly payments. For tax year 2021, remaining quarterly estimated tax payments are due from individual taxpayers on June 15 and September 15, 2021, and January 15, 2022. The fastest and easiest way to make estimated tax payments is electronically using Direct Pay or Electronic Federal Tax Payment System. Taxpayers can visit IRS.gov for other payment options.


IRS Has New Direct Pay Option

May 24, 2014

No need for stamps, envelopes, or running to the Post Office anymore.
You can now use this secure service to pay your tax bill or make an estimated tax payment directly from your checking or savings account at no cost to you.

You’ll receive instant confirmation that your payment has been submitted.

Bank account information is not retained in IRS systems after payments are made.
Just click on this link and follow the 5 easy steps below: http://www.irs.gov/Payments/Direct-Pay

1. Provide tax information
2. Verify identity
3. Enter payment information
4. Review and electronically sign the transaction
5. Print or record your online confirmation number

It’s that easy!

Note: You must have a valid Social Security Number (SSN) to use this application.


Six Tips on Making Estimated Tax Payments

April 6, 2013

Some taxpayers may need to make estimated tax payments during the year. The type of income you receive determines whether you must pay estimated taxes. Here are six tips from the IRS about making estimated tax payments.
1. If you do not have taxes withheld from your income, you may need to make estimated tax payments. This may apply if you have income such as self-employment, interest, dividends or capital gains. It could also apply if you do not have enough taxes withheld from your wages. If you are required to pay estimated taxes during the year, you should make these payments to avoid a penalty.
2. Generally, you may need to pay estimated taxes in 2013 if you expect to owe $1,000 or more in taxes when you file your federal tax return. Other rules apply, and special rules apply to farmers and fishermen.
3. When figuring the amount of your estimated taxes, you should estimate the amount of income you expect to receive for the year. You should also include any tax deductions and credits that you will be eligible to claim. Be aware that life changes, such as a change in marital status or a child born during the year can affect your taxes. Try to make your estimates as accurate as possible.
4. You normally make estimated tax payments four times a year. The dates that apply to most people are April 15, June 17 and Sept. 16 in 2013, and Jan. 15, 2014.
5. You should use Form 1040-ES, Estimated Tax for Individuals, to figure your estimated tax.
6. You may pay online or by phone. You may also pay by check or money order, or by credit or debit card. You’ll find more information about your payment options in the Form 1040-ES instructions. Also, check out the Electronic Payment Options Home Page at IRS.gov. If you mail your payments to the IRS, you should use the payment vouchers that come with Form 1040-ES.
For more information about estimated taxes, see Publication 505, Tax Withholding and Estimated Tax. Forms and publications are available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).


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