Estimated Tax Payment Deadline Passed—What do I do?tax tips | September 21, 2017 | By Susannah McQuitty
September 15 was the most recent quarterly estimated tax deadline for freelancers and independent contractors, and—dang it—it’s already gone.
Whether you just got distracted with football season starting or tagging pictures of blankets and coffee with #FriYay, you know that now you’ve got to go back and do some damage control.
Just how much is the damage, though? After all, it’s only been a few days, right?
Is there a late fee for estimated tax payments?
Yes, there is a late fee for your estimated tax payments that come after the quarterly deadlines, but you won’t see it called a “late fee” per se. The IRS doesn’t see your payment as late: They see it as an underpayment for whichever quarter the deadline covered.
Since you missed the June-to-September estimated tax payment deadline (even if you only missed it by a day), you’ll be penalized as not paying estimated taxes for the June-to-September quarter.
Don’t panic just yet, though! There’s light at the end of the tunnel.
Should I wait until the next estimated tax deadline to make my payment?
No: You shouldn’t wait until the next estimated tax payment deadline to pay your late estimated taxes, because the underpayment penalty is calculated by looking at the amount you owed and how long it was before you paid up.
The good news is that if you pay as soon as possible after the missed deadline, you can reduce the penalty amount owed.
So how much is the penalty for late estimated tax payments?
Since the IRS looks at several different factors to figure penalty amounts, there’s not a hard-and-fast rule for how much your penalty will be. The IRS will calculate your penalty for you, but you may want to calculate it for yourself if:
- You want to request a waiver for part of the penalty,
- Your income varied throughout the year, making your payments uneven, or
- Your penalty is lower when your payments are treated as being paid when you withheld them instead of on equal amounts on the due dates.
If any of the above apply, you can use Form 2210 to calculate your penalty. Also, make sure you file your annual tax return before the April deadline next year. If you do that and pay your estimated tax underpayment penalty by the bill date, you won’t owe any interest on the penalty amount.