Here’s How You Can Pay Your Final Quarterly Tax Bill Due Jan. 18
The IRS recently issued a reminder saying that if you want to avoid a surprise tax bill and possible penalty, Jan. 18, 2022, is the deadline to make your final 2021 quarterly tax payment. Taxpayers who paid too little during 2021 can also avoid underpayment penalties by making a payment by the deadline.
Because income tax is a pay-as-you-go system, taxpayers must pay their estimated tax throughout the year as income is earned and received. According to the agency, there are two ways to do this:
- Withholding from paychecks, pension payments and some government payments.
- Make quarterly estimated tax payments throughout the year.
If you need to make an estimated tax payment by the final quarterly deadline, you can use IRS Direct Pay to do so electronically or schedule a payment in advance. You can also sign in to your IRS Online Account to make a payment. From there, you can also view your payment history — and pending or recent payments. There is no fee to use these services, and electronic payments ensure that payment is credited quickly.
The IRS also accepts same-day wire transfers, check or money order payments, cash through a retail partner (or an IRS Taxpayer Assistance Center) as well as electronic funds withdrawals during e-filing.
If you haven’t made estimated tax payments throughout the year, making a payment by the Jan. 18 deadline could lessen or eliminate any possible penalty, according to the IRS. The penalty calculation also considers the date when payments were made — so making a payment before the April filing deadline could help as well.
The IRS also accepts full and partial payments, as well as payments towards a payment plan; however, penalties and interest will continue to accrue until the balance is paid in full.
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