Deadlines for 2024 Estimated Taxes

People who work for companies have estimated taxes withheld from their paychecks, but self-employed people, business owners, and those who live on investment income are required to proactively pay estimated taxes on a quarterly basis.

In the United States, income taxes are pay-as-you-go. If you don't keep up with payments, you could end up with a large tax bill in addition to penalties for late payment when it comes time to file your return.

When Are Estimated Tax Payments Due?

Estimated tax payments are typically made incrementally, on quarterly tax dates: April 15, June 15, Sept. 15, and Jan. 15 of the following year, unless a due date falls on a weekend or legal holiday. Here are the dates for 2024:

While the first quarter is the first three calendar months of the year, the second "quarter" is only two months long (April 1 to May 31). The third quarter is the next three months (June 1 to Aug. 31), and the fourth quarter covers the final four months of the year.

If a due date falls on a weekend or legal holiday, payments are due on the next business day. In 2022, for example, the deadline to pay first quarter estimated taxes is Monday, April 18, due to the Emancipation Day holiday in Washington, D.C., which falls on Friday, April 15. (By law, Washington, D.C., holidays affect federal tax deadlines.)

Who Pays Estimated Taxes?

Anyone who expects to owe $1,000 in taxes after taking into account any withholding and refundable tax credits such as earned income credits and premium tax credits will need to file estimated taxes.

Self-employed people, small business owners, and anyone else who receives income that has not had taxes withheld from it need to pay estimated taxes to avoid or minimize penalties for late payment.

If you receive pension or annuity income, you can ease the burden by filing Form W-4P with the plan administrator to have tax automatically withheld. You can also opt for voluntary withholding on payments such as Social Security benefits and unemployment benefits by filing Form W-4V.

What’s New for Tax Year 2023

When you go to file your 2023 taxes (the ones you'll file in 2024), you'll want to take these updates and adjustments into account:

• The standard deduction for tax year 2023 raises to $27,700 for married couples filing jointly, $13,850 for single taxpayers and married couples filing separately, and $20,800 for heads of household.
• The maximum Earned Income Tax Credit (EITC) for 2023 is $7,430 for taxpayers with three or more qualifying children. To qualify for the EITC, your investment income must have been less than $11,000 in 2023.
• The annual exclusion for gift taxes increases to $17,000 per donee for tax year 2023.
• The maximum amount individuals could contribute to their 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan in 2023 increased to $22,500, up from $20,500 in 2022. The catch-up contribution limit for employees aged 50 and over increased to $7,500.
• For IRA accounts, the 2023 contribution limit was raised to $6,500.  Catch-up contributions for individuals aged 50 and over remained at $1,000.
  

Inflation Adjustments

Dozens of tax breaks are adjusted annually for inflation, such as the IRS standard mileage rates. These may get you a tax break even if your income remained consistent from tax year to tax year.

Changes in Circumstances

Consider what was new for you in 2023. Did a marriage or divorce change your filing status and the associated tax rates? Has a new home purchase entitled you to deductions for mortgage interest and real estate taxes?

Life events can affect your taxes. 

The Bottom Line

While estimating taxes isn’t an exact science, coming close to the correct amount will help you avoid penalties if you’re mindful of the quarterly deadlines. It can be a good idea to consult a tax professional when questions arise about complex tax issues.