September 15, 2024, deadline is crucial for making your third quarterly estimated tax payment. Be prepared to avoid penalties and stay compliant with IRS regulations.
Who needs to pay
- Individuals (sole proprietors, partners, S corporation shareholders) need to make estimated tax payments if they expect to owe $1,000 or more.
- Corporations must pay if they expect to owe $500 or more.
How to calculate estimated tax
- Individuals: Use Form 1040-ES (or Form 1040-ES(NR) for non-resident aliens)
- Corporations: Use Form 1120-W.
- Make sure to calculate your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.
Avoid penalties
Underpayment penalties apply if you don’t pay enough throughout the year. Avoid this by paying at least 90% of the current year’s tax or 100% of last year’s tax.