TLDR:
- Filers should check for tax underpayments to avoid penalties.
- The U.S. income tax is a pay-as-you-go system, requiring most employees and self-employed business owners to pay at least 90% of their taxes before the April due date.
Filers need to be aware of the rules and regulations surrounding tax withholding and estimated taxes for the year 2024. The U.S. income tax system operates on a pay-as-you-go basis, meaning that individuals are required to pay a certain percentage of their taxes before the April due date, which is April 15, 2024 for individual tax returns in 2023. This date can be extended for victims of federally declared disasters. However, it is important to note that an extension to file tax returns does not delay the requirement to pay taxes owed by the April due date.
Failure to pay enough taxes throughout the year can result in penalties. To avoid this, filers should check for tax underpayments and adjust their withholding or estimated tax payments accordingly. Checking for underpayments can be done by using the IRS’s withholding calculator or by following the instructions on Form 2210.
In addition to these rules, filers can also request a six-month extension to file their tax returns. This extension would move the deadline to October 15, 2024. However, it is important to note that this extension only applies to the filing of the return, not to the payment of taxes owed.
Overall, it is crucial for individuals to stay informed about the rules and regulations surrounding tax withholding and estimated taxes to avoid penalties. The pay-as-you-go system requires individuals to pay a certain percentage of their taxes throughout the year, and failing to do so can result in financial consequences. By checking for tax underpayments and adjusting payments accordingly, filers can ensure that they are meeting their tax obligations and avoiding unnecessary penalties.
