Make final 2021 quarterly tax payment now to avoid surprise tax bill, possible penalty
(Gray News) – The IRS is urging taxpayers to check their options ahead of 2021 filings to avoid being subject to estimated tax penalties.
If you underpaid on taxes in 2021, you have until Jan. 18, 2022, to make an estimated payment for the fourth quarter of 2021.
Typically, income taxes are pay-as-you-go with income earned or received during the year through withholdings.
Some people who are self-employed will make quarterly estimated tax payments instead.
Either option can help avoid a surprise bill at tax time and the accompanying penalty that often comes with it.
The IRS says making an estimated payment for missed taxes sooner than later could help lessen or even eliminate any possible payment.
If you owed taxes when you filed your 2020 tax return, it is likely you’ll find yourself in a similar situation again unless you took action to increase your withholding during 2021.
Notably, families who received advanced payments of the Child Tax Credit in 2021, but don’t expect to qualify when they file may need to make an estimated tax payment.
According to the IRS, using IRS Direct Pay is the fastest and easiest way to make estimated payments ahead of the January deadline.
The IRS is sending letters to people who received the credit or an Economic Impact Payment. It’s important to keep both letters for your records as you prepare to file your taxes.
You will need to enter the exact amount you received in order to delay your 2021 tax refund.
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