These taxpayers must meet the April 15 deadline for filing

Some taxpayers still have to send money to Uncle Sam in April, though the IRS has extended the tax filing season until May 17.

Those making estimated tax payments are still on the hook for their first quarterly levy, payable on the original April 15 tax filing deadline.

This includes people who, according to the IRS, have incomes that are not subject to withholding, such as earnings from self-employment, interest, dividends, rent and maintenance.

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It mostly affects freelance and performance workers, as well as those with small businesses such as sole proprietorships, partners and shareholders in the S corporation – usually anyone who does not work for an employer who withholds tax from their salary.

The deadline indicates a change from 2020, when the IRS pushed back the deadline for the first of four estimated tax payments to July 15 due to the coronavirus pandemic. However, the agency did not reject the three remaining payments – the second quarterly payment also had to be paid on 15 July 2020.

What to do

To avoid fines for underestimating estimated taxes, people who owe more than $ 1,000 in taxes after deducting withholding and credits must pay the IRS at least 90% of the tax for the current year or 100% of the tax for the previous year paid. .

This tax is paid in four quarterly installments and can be sent to the IRS either online or by check. For those who have continuous income throughout the year, these payments are generally equal, but they can be changed for those with unequal earnings.

Because the payment of estimated payments means that taxpayers need to know their income from the past year, this group is unlikely to be able to take advantage of the long filing season.

To calculate a quarterly estimated payment, taxpayers should project their income for the year or have their income from the previous year at hand, as they would have it for their tax return.

“You still have to complete the 2020 return to get a bottom line to make an estimate,” said Rhonda Collins, director of tax content and government relations at the National Association of Tax Professionals. “So it will create some more work for the taxpayer.”

In addition, small businesses and self-employed individuals who pay estimated taxes have been particularly affected by the Covid pandemic and may have to deal with various issues that could complicate the filing of taxes. Some have loans through the Paycheck Protection Program, a disaster loan for economic injuries or a grant.

“Taking all these things together, there’s really no relief for those individuals,” said Barry Melancon, a certified public accountant, chartered global management accountant, and president and CEO of the American Institute of CPAs.

There are fines if you miss a payment

To be sure, those who have to make the quarterly payments to manage their cash flow throughout the year can help maintain the estimated April 15 deadline, says Sheneya Wilson, CPA and founder of Fola Financial in New York.

Even if you do make estimated payments, you can calculate what you owe for April 15 and utilize the extension to file your tax return later, Wilson said.

According to Adam Markowitz, an enrolled agent at Howard L Markowitz PA CPA in Leesburg, Florida, the fines are generally small amounts.