These taxpayers must adhere to the filing deadline of April 15

Some taxpayers are still required to send money to Uncle Sam in April, even though the IRS has extended the tax filing season to May 17.

Those making estimated tax payments are still on their first quarterly tax, which is due on the original tax filing deadline of April 15.

That includes people who have income that isn’t withheld, such as self-employment income, interest, dividends, rent, and alimony, according to the IRS.

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This mainly affects freelancers and gig workers, as well as those with small businesses such as sole proprietors, partners and shareholders of S corporations – generally anyone who doesn’t work for an employer that deducts taxes from their paychecks.

The due date marks a change from 2020, when the IRS moved the deadline for the first of four estimated tax payments to July 15 due to the coronavirus pandemic. However, the agency did not roll back the three remaining payments – the second quarterly payment was also due on July 15, 2020.

What you need to do

To avoid penalties for underpaid estimated taxes, people who owe more than $ 1,000 in tax after deducting withholding taxes and credits must inform the IRS at least 90% of the tax for the current year or 100% of the tax for the previous year pay, whichever is less. .

This tax is paid in four quarterly installments and can be sent to the IRS online or by check. For those who have a constant income throughout the year, these payments are generally equal, but can be varied for those with unequal earnings.

Since making estimated payments means that taxpayers need to know their income for the past year, this group is unlikely to benefit from the extended filing season.

To calculate an estimated payment per quarter, taxpayers must either project their income for the year or have their previous year’s income on hand, as they would for their tax return.

“You have to complete the 2020 tax return to get a total figure to roughly estimate an estimate,” said Rhonda Collins, director of tax content and government relations at the National Association of Tax Professionals. “So it will give the taxpayer some work.”

In addition, small businesses and the self-employed who pay estimated taxes have been particularly hard hit by the Covid pandemic and may face multiple issues that complicate tax filing. Some may have loans through the Paycheck Protection Program, a disaster economic loss loan, or a grant.

“Putting all of these things together, there really is no relief for those individuals,” said Barry Melancon, a licensed public accountant, chartered accountant for global management and president and CEO of the American Institute of CPAs.

There are fines if you miss a payment

Certainly, adhering to the estimated tax term of April 15 could help those who need to make the quarterly payments manage their cash flow year-round, said Sheneya Wilson, CPA and founder of Fola Financial in New York.

Even if you make estimated payments, you can calculate what you owe by April 15 and take advantage of the extension to file your tax returns later, Wilson said.

Additionally, if you miss or underpay the first payment, the fines are generally minor amounts, according to Adam Markowitz, a registered agent with Howard L Markowitz PA CPA in Leesburg, Florida.