REMINDER – Final 2022 quarterly estimated tax payments are due to the IRS no later than next Tuesday, January 17!
Although 2022 federal individual income tax returns are not due until April 18, 2023 (or October 17, 2023 with a timely filed extension), taxpayers are still required to prepay their estimated tax due throughout the year. Taxpayers must pay tax as income is earned or received through withholding from paychecks or by making quarterly estimated payments. Generally, individuals who expect to owe tax of $1,000 or more when their return is filed should make estimated tax payments.
Failure to pay sufficient tax through withholding and/or estimated tax payments may result in a surprise tax bill and a penalty assessment. It can also have broader long-lasting consequences. For example, it can lead to issues for taxpayers who have payment plans in place with the IRS as it can cause such preexisting agreements to default. Additionally, a history of noncompliance can impact a taxpayer’s ability to later make offers in compromise to the IRS. Finally, noncompliance can affect a taxpayer’s requests for penalty abatement in future disputes with the IRS.
For taxpayers who were required but failed to make estimated tax payments throughout 2022, making a payment now can help to avoid unexpected taxes and penalties later.
For more on the topic: https://lnkd.in/e3JYsDzW