Cook & Co. Tax Advisors rereminds self-employed individuals, retirees, investors, businesses and corporations that April 15 is the deadline for first quarter estimated tax payments for tax year 2025.
Alabama Residents and others have until May 1.
Because federal income taxes are pay-as-you-go, the law requires individuals who don’t have taxes withheld to pay taxes as their income is received or earned throughout the year. Most people meet their tax obligations by having their taxes deducted from their paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.
Taxpayers who are self-employed or in the gig economy are generally required to make estimated tax payments. Likewise, retirees, investors and others frequently need to make these payments because a significant portion of their income is not subject to withholding.
When estimating quarterly tax payments, taxpayers should include all forms of earned income, including part-time work, side jobs or the sale of goods or services, commonly reported on Form 1099-K.
Income such as interest, dividends, capital gains, alimony and rental income is normally not subject to withholding. By making quarterly estimated tax payments, taxpayers can avoid penalties and uphold their tax responsibilities.
Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters and terrorist attacks are eligible for exceptions to penalties. Also, individuals and businesses in areas covered by 2024 disaster declarations that their 2024 federal income tax returns and tax payments for tax year 2024 are due on Thursday, May 1, 2025.
Paying estimated taxes
Taxpayers can rely on Form 1040-ES, Estimated Tax for Individuals, for comprehensive instructions on computing their estimated taxes.
IRS Online Account streamlines the payment process for taxpayers making estimated payments. There, they can make and view their payment history, monitor pending payments and access pertinent tax information.
Taxpayers have several options to make an estimated tax payments, by mail or pay online with IRS Direct Pay, debit card, credit card, digital wallet or the Treasury Department’s Electronic Federal Tax Payment System.
To pay electronically and for more information on other payment options, visit Make a payment. If paying by check, be sure to make the check payable to the “United States Treasury”.
Publication 505, Tax Withholding and Estimated Tax, offers detailed information for individuals navigating dividend or capital gains income, alternative minimum tax or self-employment tax, or who have other special situations.
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