The September tax filing deadline is fast approaching, but there is some relief for taxpayers in designated disaster areas.
The IRS has announced that individuals and businesses in these regions will automatically receive an extension, giving them more time to make their estimated tax payments.
Key Dates and Groups Affected
September 16 Deadline: This is a critical date for taxpayers who do not have taxes withheld from their paychecks by an employer. This group includes:
- Self-employed individuals
- Retirees
- Investors
- Businesses and corporations
The IRS warns that underpayment of taxes can result in penalties, even if the taxpayer is due a refund when filing their return. It’s essential for these groups to meet the September 16 deadline to avoid penalties if they are not in a disaster-designated area.
IRS Guidelines for Estimated Payments
Taxpayers should make estimated payments if they expect:
- To owe at least $1,000 in taxes for 2024 after subtracting withholding and tax credits.
- Their withholding and tax credits to be less than either:
- 90% of the tax shown on their 2024 tax return, or
- 100% of the tax shown on their 2023 tax return.
For detailed guidance, taxpayers can visit the IRS website’s Tax Withholding Estimator.
Extensions for Taxpayers in Disaster Areas
Taxpayers residing in disaster-affected areas across 17 states, Puerto Rico, and the Virgin Islands may receive an automatic extension for their tax payments. The new deadline will vary based on the severity of the disaster and the location.
For example, as of September 5, taxpayers in parts of Arkansas, Iowa, Mississippi, New Mexico, Oklahoma, Texas, and West Virginia have been granted an extension until November.
If you are in a disaster-designated area, you may have more time to file and make payments. However, for those not in these areas, it’s crucial to meet the September 16 deadline to avoid penalties.
Make sure to review the IRS guidelines and consider your expected tax liability to determine whether you need to make an estimated payment.
FAQs
Who needs to make an estimated tax payment by September 16?
Self-employed individuals, retirees, investors, and businesses without employer withholding.
What happens if I miss the September 16 deadline?
You may face penalties for underpayment, even if you receive a refund when filing your return.
Can I get an extension if I live in a disaster-affected area?
Yes, the IRS automatically grants extensions to taxpayers in designated disaster areas.
How do I know if I should make an estimated payment?
Make a payment if you expect to owe at least $1,000 after subtracting withholding and tax credits.
Where can I find detailed guidance on making estimated payments?
Visit the IRS website’s Tax Withholding Estimator for more information.
