The IRS has extended the estimated tax payments deadline from April 15 and June 15, to July 15 for tax year 2020 due to the COVID-19 outbreak. Therefore, any individual or corporation that has a quarterly estimated tax payment due has until July 15 to make that payment without penalty. Moreover, taxpayers can avoid an underpayment penalty by owing less than $1,000 at tax time or by paying most of their taxes during 2020 which means making payments of at least 90-percent of the tax expected on their 2020 return.
Taxpayers need to pay their taxes as income is received via two ways:
- withholding from pay, pension or certain government payments such as Social Security; and/or
- making quarterly estimated tax payments during the year.
If a taxpayer receives a paycheck, the Tax Withholding Estimator can help them make sure they have the right amount of tax withheld from their pay. If a taxpayer receives salaries and wages, they can avoid having to pay estimated tax by asking their employer to withhold more tax from their earnings by filing a new Form W-4. Further, taxpayers can make estimated tax payments electronically and schedule them up to 30 days in advance with Direct Pay or up to 365 days in advance with the Electronic Federal Tax Payment System. In addition, taxpayers can figure their estimated taxes by following the instructions on Form 1040-ES, Estimated Tax for Individuals. Lastly, the IRS has requested taxpayers to search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions and Tax Trails to get answers to common questions related to estimated tax payments.