Quarterly estimated tax payments pay your income tax and self-employment tax, and are generally required if you expect to owe at least $1,000 in taxes for the year.
What penalties can I face for not paying taxes on time?
If you do not make your quarterly estimated tax payments on time, you may be subject to penalties and interest.
The specific amount of the penalty will depend on the amount of taxes you owe and the length of time that you’re late in making your payment. In general, the penalty for not making quarterly estimated tax payments is calculated as a percentage of the taxes you owe.
Are penalties ever waived?
In some cases, the penalties for not making your quarterly estimated tax payments on time may be waived or reduced if you have paid a certain amount of your taxes. For example, if you have paid at least 90% of the taxes you owe for the current tax year, the penalty may be waived.
To request a waiver or reduction of the penalty, you will need to file Form 2210 with your tax return. On this form, you’ll need to provide information about the amount of taxes you have paid, the amount you owe, and an explanation for why you are requesting a waiver or reduction.
The IRS has the final say on whether or not the penalty will be waived or reduced. If your request is denied, you will be required to pay the penalty and any interest that has accrued.