Not to be a nag, or a reminder as I insist to the hubby, but I'm putting that tax task out there again today.
The third installment for the 2019 tax year is due Sept. 16. Yes, that's a day later than normal, but the usual 9/15 due date falls on Sunday.
So you get an extra day, next Monday, to either snail mail your 1040-ES voucher and check or money order to the Internal Revenue Service or to electronically pay this month's estimated tax amount.
Estimated tax e-payment options: Despite my choice of blog art, I'm an estimated (and other) tax e-payer. Long ago, I set up an EFTPS account.
That acronym, pronounced eff-tips is you want to drop it into casual conversation, is short for the official Electronic Federal Tax Payment System moniker.
An EFTPS account allows me to schedule all four of my estimated tax payments — the due dates of which are shown below — in April and not worry about missing them.
|Payment #||Due Date*||For income received in|
|1||April 15||Jan. 1 through March 31|
|2||June 15||April 1 through May 31|
|3||Sept. 15||June 1 through Aug. 31|
|4||Jan. 15 of the next year||Sept. 1 through Dec. 31|
As the asterisk above notes, the dates change for calendar situations, like this quarter's shift to Monday, Sept. 16.
All I do have to worry about with my all-in-April estimated tax scheduling is whether there's enough money in my bank account to cover my payment amounts on the above dates.
Other e-payment options include:
- Direct Pay for online transfers directly from your checking or savings account at no cost to you.
- Debit or credit card, but note that a convenience fee is charged by the card issuers.
- Electronic Funds Withdrawal (EFW) is an integrated e-file/e-pay option offered when filing your federal taxes electronically using tax preparation software.
- Same-day wire from your financial institution. Contact your financial institution for availability, cost and cut-off times. The downloadable Same-Day Taxpayer Worksheet can help.
- Cash payments of up to $1,000 per day per transaction in person at select retail partners, primarily 7-Eleven stores. To use this method, you must first be registered online with Official Payments.
If you're more mobile, you can use Uncle Sam's IRS2Go app to access Direct Pay and Pay By Card options on your handheld devices.
Don't miss the deadline: Whichever payment method you use, make sure to do so by the due date or, if set-up time is necessary, in time to get that method in place.
If you don't make the correct payment amounts and on time, you could face an underpayment penalty when you do file your taxes next year.
And unlike this filing season when the IRS waived the estimated tax penalty due to withholding confusion in connection with the Tax Cuts and Jobs Act (TCJA) changes — and in some cases is mailing refunds to affected folks — the tax collector won't be so accommodating in the 2020 tax season.
Check your withholding: Speaking of the TCJA, the IRS notes that with 2019 being the second full year with the new tax law in place, most of us have an idea of what our upcoming tax bill will be.
But just to be sure and the guarantee that you don't underpay, especially if you have some income that's not subject to withholding like a gig side job or investments, you should check out the IRS' updated Tax Withholding Estimator.
This new and improved tool is now more mobile friendly and replaces the Withholding Calculator on IRS.gov.
Among the revisions is the ability to take into account not only taxes withheld from paychecks, but also what is owed on earnings from retiree pensions, self-employed income and the variety of other income sources generally not subject to withholding, such as interest, dividends, capital gains, rental income and in some cases alimony.
Check it out. Then send in your correct third quarter estimated tax payment by (just a reminder, not a nag) Monday, Sept. 16.
You also might find these items of interest:
- How to avoid estimated tax penalties
- 7 backup withholding tax questions & answers
- 3 ways to navigate estimated tax penalty safe harbors