Tax Deadlines You Need to Know for the Second Half of 2024
Image: Bigstock
April 15. It looms large in the taxpayer's calendar. But did you know it's not the only date that matters?
Are you self-employed? An investor? Retired? Or maybe you're one of the 19 million people who applied for a filing extension earlier this year? If so, you might be overlooking some important IRS deadlines coming up later this year.
Missing key tax deadlines could mean shelling out more than necessary, and recently, the penalties are even higher than usual. In 2023, the IRS bumped up the interest it charges on penalties to 8% — the peak rate since the early 2000s.
With these higher stakes in mind, let's dive into the crucial tax deadlines you need to keep an eye on for the rest of the year.
Key Tax Deadlines You Need to Know for the Rest of 2024
Staying on top of your tax obligations means knowing the crucial dates. Here's a concise overview of the important tax deadlines in the second half of 2024:
October 15, 2024:Final Extended Deadline for Filing 2023 Individual Tax Returns
This is the final deadline for anyone who requested an extension on their 2023 federal tax returns. To avoid a late-filing penalty, you must file by this date.
September 16, 2024:Q3 Estimated Tax Payment (for June 1 - Aug. 31)
January 15, 2025:Q4 Estimated Tax Payment (for Sept. 1 - Dec. 31)
The above dates are the last two quarterly deadlines for paying estimated taxes on money you earned in 2024. The first two quarterly tax payments for 2024 were due April 15 and June 17.
These are essential dates to remember if you're earning money and taxes aren't automatically being withheld (more on that in a minute). To dodge these steep underpayment fees, it's essential to pay the right amount on time.
Who Needs to Pay Attention to the Filing Extension Deadline?
This one is relatively straightforward...
Did you file for an extension back in April?If so, then circle Oct. 15 on your calendar with a big red marker. This is the final extended deadline for submission. Ensuring your tax returns are completed and filed by October 15 is crucial to avoid penalties.
If you didn't file for an extension, then this is just another Tuesday for you. Enjoy it!
Who Needs to Pay Attention to the Quarterly Estimated Tax Payment Deadlines?
Even though most of us only think about paying taxes in April, income taxes are actually paid throughout the year. For most people, employers take care of this by withholding and paying a portion of their federal and state taxes directly from each paycheck.
However, if you're a freelancer or if you earn certain types of income that aren't subject to automatic withholding — like dividends, capital gains, or prizes — you still need to make tax payments (or technically, "prepayments") throughout the year on this income. You just have to do it yourself.
This is where those quarterly estimated tax payment deadlines come in. The IRS imposes these deadlines to make sure people keep up with their tax obligations throughout the year. Missing these payments can lead to penalties, so it's important to stay organized and proactive.
But even if you're a regular W-2 employee and have an employer that withholds taxes from your paycheck, you might still need to make estimated tax payments. It all depends on if you earn a substantial amount of income from other sources that aren't withholding taxes. If you do, you need to be paying taxes on it throughout the year.
People who have to make quarterly estimated tax payments often fall into at least one of the following groups...
Self-Employed Individuals and Freelancers: Are you self employed? Do you earn income as a freelancer or contractor? Do you normally receive 1099 forms for your work? If so, you're responsible for making quarterly estimated tax payments.
Investors: If a significant amount of your income is coming from investments, such as dividends, capital gains, or interest, you likely need to be making estimated tax payments on the amounts.
Employees with Significant Non-Wage Income:If you're bringing in a lot of extra income from sources other than your regular employer — think side gigs, rental properties, or other ventures — you might need to make estimated tax payments. This is important even if you have regular tax withholdings from a primary job.
Retirees: Retirees who receive income from pensions, annuities, or withdrawals from retirement accounts like IRAs might need to make estimated tax payments if sufficient taxes aren't withheld from these sources.
If you don't belong to any of those groups but you're still not sure if you should be making quarterly tax payments, ask yourself these two questions:
Are you a U.S. citizen? When you filed your 2023 tax return back in April, did you owe less than $1,000?
If the answer to both of those questions is "yes,"then you're probably in the clear.
If the answer to either question was no, you may need to start making estimated tax payments.
Additionally, some states require estimated tax payments for state taxes. The requirements, deadlines, and rules for these payments can vary, so it's a good idea to check the website of your state's tax department for specific information.
If your tax situation is complex, consulting with a CPA or tax advisor can be a wise investment. They can provide guidance tailored to your specific circumstances, help optimize your tax strategy, and ensure you're taking advantage of all available tax benefits — and not missing any important tax deadlines!
Penalties for Missing Deadlines
Missing tax deadlines can lead to more than just a slap on the wrist from the IRS.
Filing your tax return after the deadline without an extension can cost you 5% of the unpaid taxes for each month or part of a month that your return is late, up to a maximum of 25%.
(And don't forget — an extension to file is not an extension to pay. Even if you do file for an extension, you're still required to pay [your estimated tax bill?] when it's due in April. The extension just gives you more time to complete your filing paperwork.)
If you miss a payment deadline for estimated taxes, the IRS imposes a penalty of 0.5% of the unpaid taxes for each month or part of a month that the tax remains unpaid, up to 25%.
The IRS also charges interest on penalties, currently to the tune of 8%. This continues to accrue until you pay your balance in full.
Here's what that looks like in real life. Let's say you're self-employed and have a nice freelance income. Based on your prior-year taxes, you should have prepaid $3,000 in estimated taxes on June 17, but you don't realize that until the beginning of September. If you pay your late tax bill on September 1, you'll owe...
$3,000 you owed in estimated quarterly taxes, plus...
$45 failure-to-pay penalty (0.5% of $3,000 per month for three months), plus...
$50.39 of interest accruing at a rate of 8%...
That's nearly $100 in unnecessary penalties for missing your quarterly estimated payment by only three months. The more income you have and the longer your missed tax bill goes unpaid, the quicker those penalties start adding up to hundreds and sometimes thousands of dollars.
Look, no one wants to pay Uncle Sam any more money than they absolutely have to. By staying on top of these important tax deadlines — and avoiding harsh IRS penalties — you can keep more of your hard-earned money in your wallet.
And if you do miss a deadline, don't beat yourself up about it. The best thing you can do is act quickly. Pay as much as you can as soon as you can to minimize additional penalties and interest. If you can't pay in full, the IRS offers installment plans that allow you to pay over time. And if your missed payment was due to a reasonable cause, like an unforeseen circumstance or disaster, the IRS may even reduce or cancel your penalty altogether.
Keeping up with tax deadlines helps you manage your finances smoothly and avoid unnecessary fees. Plan ahead, stay informed, and tackle each deadline as it comes. With a good strategy, you can handle tax season without stress and keep your finances in top shape. Make sure your calendar is marked and your calculations are accurate — your wallet will thank you later.