When Are Quarterly Taxes Due 2021

Nerships & S Corporations

Estimated tax is the method used to pay tax on income that is not subject to withholding. Individuals who are not residents of Colorado must pay tax on any Colorado-source income. This is intended for nonresident individuals who are included in a partnership or S corporation composite filing. In most cases, you will pay estimated tax if an individual partner expects to owe more than $1,000 in net tax for the year, after subtracting any withholding or refundable credits they might have. This rule must be calculated for each individual included in the composite return, and not as the composite as a whole. Use the Partnerships and S Corporation Estimated Payment Form to submit your business’ estimated payments.

You may also use Revenue Online to submit your partnership or S corporation estimated payments.

Who Needs To Make A Payment

People who owed tax when they filed their 2020 tax return may find themselves in the same situation again when they file for 2021. This will likely be true, especially if they failed to take action to avoid another shortfall by increasing their withholding during 2021.

People in this situation often include those who itemized in the past but are now taking the standard deduction, two wage-earner households, employees with non-wage sources of income and those with complex tax situations.

In addition, families who received advance payments of the Child Tax Credit during 2021 but don’t expect to qualify for the credit when they file their 2021 return, may need to make an estimated tax payment.

Are There Exceptions To Quarterly Taxes

Some small businesses may not need to pay estimated quarterly taxes. If an individual or a business expects or estimates to owe less than $1,000 in taxes for the year, then quarterly taxes may not need to be paid. Additionally, corporations may not need to pay quarterly taxes if they expect to owe less than $500 in taxes for the year.

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Most Important Tax Dates For Business Owners

The following are the most important tax dates for businesses that use a calendar year as their tax year. If your business uses a fiscal year, taxes are due on the 15th day of the third or fourth month after the business tax year, depending on what type of business it is.

The dates for corporations are different from the dates for partnerships and S corporations because the partnership and S corporation income passes through to the owners of the business. Corporations, on the other hand, pay the taxes themselves.

Heres an at-a-glance look at the most important tax dates for business owners in 2021:

Choose How To Make Your Payment

You can pay your estimated tax electronically with DOR, by mail, or in person.

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Who Should Pay Quarterly

In most cases, taxpayers should make quarterly estimated tax payments for 2021 if both of the following apply:

• Individuals expect to owe at least $1,000 in tax for 2021 after subtracting their withholding and tax credits.
• They expect their withholding and tax credits to be less than the smaller of:
• 90% of the tax to be shown on their 2021 tax return or
• 100% of the tax shown on their 2020 tax return. Their 2020 tax return must cover all 12 months.

Taxpayers with income not subject to withholding, including interest, dividends, capital gains, alimony, cryptocurrency and rental income, normally make estimated tax payments.

Special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. Publication 505, Tax Withholding and Estimated Tax, provides more information on estimated tax rules. The worksheet in Form 1040-ES, Estimated Tax for Individuals, or Form 1120-W, Estimated Tax for Corporations, has details on who must pay estimated tax.

Due On Or Before April 19 2022

Form 355

• File a 2021 calendar year return and pay any tax due. If requesting time to file a return please ensure to deposit what you estimate you owe in tax as your extension payment.

Form 355SC:

• File a 2021 calendar year return and pay any tax due. If requesting time to file a return please ensure to deposit what you estimate you owe in tax as your extension payment.

Form 355U

• File a 2021 calendar year return and pay any tax due. If requesting time to file a return please ensure to deposit what you estimate you owe in tax as your extension payment.

Form M-990T

• File a 2021 calendar year return and pay any tax due. If requesting time to file a return please ensure to deposit what you estimate you owe in tax as your extension payment.

Form 180:

• File a 2021 calendar year return and pay any tax due.

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How To Pay Estimated Taxes

Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. They can also visit IRS.gov/payments to pay electronically. The fastest and easiest ways to make an estimated tax payment is by using IRS Direct Pay, the IRS2Go app or the Treasury Department’s Electronic Federal Tax Payment System . For information on other payment options, visit IRS.gov/payments. If paying by check, taxpayers should be sure to make the check payable to the “United States Treasury.”

Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.

What You Need To Know About The Oct 17 Deadline

If you have requested an extension, you must file your taxes on or before the final deadline. The IRS has already granted additional time to prepare your tax return. Any filers who miss this extended deadline will be subject to a failure-to-file penalty that can be as high as 25% of the amount owing, depending on how long it takes them to pay, and additional penalties. For this reason, it is imperative that anyone who has not yet filed get their taxes in order and filed before the deadline passes.

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Forms Filed Annually With A Due Date Of February 28

• File Form 1099-MISC, Miscellaneous Income, with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, with the IRS to report rents, royalties, prizes and awards and other fixed or determinable income paid in the prior calendar year. See instructions for the Form 1099-MISC for all the different types of income that is required to be reported and the applicable dollar amount reporting threshold. Forms 1099-MISC and 1096 may be filed electronically, for more information see Publication 1220PDF. If you file Forms 1099-MISC and 1096 electronically, then the due date is March 31. Generally, Forms 1099-MISC must be furnished to payees by January 31.
• File Form 8027, Employers Annual Information Return of Tip Income and Allocated Tips, with the IRS to make an annual report for the previous year for your receipts from food and beverages and for the tips employees reported to you if you are a large food or beverage establishment. See Publication 15 for more information including the definition of a large food or beverage establishment and see Publication 1239, Specifications for Electronic Filing of Form 8027, Employer’s Annual Information Return of Tip Income and Allocated TipsPDF, for help in electronically filing Forms 8027. If you file Form 8027 electronically, then the due date is March 31.

Penalty For Underpayment Of Estimated Tax

If you didnt pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers, fishermen, and certain higher income taxpayers. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.

However, if your income is received unevenly during the year, you may be able to avoid or lower the penalty by annualizing your income and making unequal payments. Use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts , to see if you owe a penalty for underpaying your estimated tax. Please refer to the Form 1040 and 1040-SR Instructions or Form 1120 Instructions PDF, for where to report the estimated tax penalty on your return.

The penalty may also be waived if:

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What Should I Do If I Miss A Quarterly Tax Payment

If you dont pay enough tax via withholding or estimated quarterly payments, or if you make your quarterly tax payments late, you may have to pay a penalty even if youre due a refund once you file your tax return. This is because the IRS says you should make estimated tax payments in four equal amounts. Then it calculates a penalty separately for each required installment.

If you miss a payment deadline, your best bet is probably to make the payment as soon as you can. You may also be able to request that the IRS waive the penalty if you missed your payment for one of these reasons.

• You experienced a casualty event, disaster or other circumstances beyond your control. The IRS says a casualty is damage, destruction or loss of property due to an unexpected, sudden and unusual but identifiable event.
• Youre 62 or older and retired from working, or you become disabled during the year, and you had a reason for the underpayment rather than willfully neglecting to make the payment.

The Instructions for Form 2210 include information on requesting a waiver of the estimated tax penalty.

What If I Need More Time

Don’t let a looming tax deadline force you to rush through the tax filing process and make a mistake on your return. Simply request an extension.

The IRS typically grants a six-month extension of the tax filing deadline to anyone who requests it. You can request an extension electronically with TurboTax or use Form 4868.

Just keep in mind, the tax extension gives you more time to file your return, not more time to pay the tax you owe. You’ll need to estimate the amount you owe and make your payment by the tax filing deadline even if you file an extension.

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How Much Are My Estimated Quarterly Tax Payments

To figure out your estimated quarterly tax estimate, use Form 1040 ES or Form 1120-W .

Form 1040ES requests your expected income for the upcoming tax year, and it helps you figure out your Social Security contributions and Medicare payments. Then, the form guides you through a number of calculations related to deductions and credits.

These steps generate your estimated income tax for the year. Finally, you multiply that amount by 90% and divide it by four. The result is your estimated quarterly tax payment.

With Form 1040ES, you make the same payment four times per year. If your income fluctuates throughout the year, you may not be able to afford to make equal payments. In these cases, you can make different payments each quarter.

Irs Reminder: Approaching June 15 Deadline For Second Quarter Estimated Tax Payments

IR-2021-125, June 8, 2021

WASHINGTON The Internal Revenue Service reminds taxpayers who pay estimated taxes that they have until June 15 to pay their estimated tax payment for the second quarter of tax year 2021 without penalty.

Estimated tax is the method used to pay tax on income that isn’t subject to withholding. This includes income from self-employment, interest, dividends, rent, gains from the sale of assets, prizes and awards. You may also have to pay estimated tax if the amount of income tax being withheld from your salary, pension or other income isn’t enough.

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What Happens If You Miss The Tax Filing Deadline And Are Owed A Refund

If you overpaid for the 2022 tax year, there’s typically no penalty for filing your tax return late. However, you should file as soon as possible.

Generally, you have three years from the tax return due date to claim a tax refund. That means for 2022 tax returns, the window closes in 2025. After three years, unclaimed tax refunds typically become the property of the U.S. Treasury.

Time To Make Contributions To Iras And Health Savings Accounts Extended To May 17

In extending the deadline to file Form 1040 series returns to May 17, the IRS is automatically postponing to the same date the time for individuals to make 2020 contributions to their individual retirement arrangements , health savings accounts , Archer Medical Savings Accounts , and Coverdell education savings accounts . This postponement also automatically postpones to May 17, 2021, the time for reporting and payment of the 10% additional tax on amounts includible in gross income from 2020 distributions from IRAs or workplace-based retirement plans. Notice 2021-21 also postpones the due date for Form 5498 series returns related to these accounts to June 30, 2021.

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What If I Don’t Pay My Estimated Taxes

It’s a good idea to post a calendar reminder as the quarterly deadline approaches to avoid paying a late penalty. You may be charged a penalty if:

• You owe more than $1,000 in taxes after subtracting withholdings and credits.
• You paid less than 90% of the tax for the current year through estimated taxes.

The penalty could be waived in some situations. If you want to delve further into estimated tax penalties and conditions of a waiver, see the instructions in IRS form 2210.

Extended Due Date Of First Estimated Tax Payment

Pursuant to Notice 2020-18PDF, the due date for your first estimated tax payment was automatically postponed from April 15, 2020, to July 15, 2020. Likewise, pursuant to Notice 2020-23, the due date for your second estimated tax payment was automatically postponed from June 15, 2020, to July 15, 2020. Please refer to Publication 505, Tax Withholding and Estimated TaxPDF, for additional information.

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Unclaimed Refunds Deadline Extended To May 17

For tax year 2017 Federal income tax returns, the normal April 15 deadline to claim a refund has also been extended to May 17, 2021. The law provides a three-year window of opportunity to claim a refund. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the May 17, 2021, date.

Additionally, foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021.

Calculating Your Estimated Tax Payments

Use Form 1040-ES to calculate your estimated tax payments. Start by figuring your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year there’s a worksheet to help you out in the instructions for Form 1040-ES. You can also look at your previous year’s tax return for a general guide. What you ultimately want is an estimate of the income you expect to earn for the year.

If your estimate is too high, just complete another Form 1040-ES worksheet to recalculate your estimated tax for the next payment. Likewise, if your estimate is too low, go to the Form 1040-ES worksheet again to readjust your next estimated tax payment. You should also recalculate if your own personal situation changes or if there are tax law changes that can affect your tax liability for the year.

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Tips On Making Your Quarterly Tax Payments Easier

• Forget filling out handwritten forms: When you use QuickBooks Self-Employed for your business, the program will figure out your estimated taxes for you. TurboTax can also figure out and generate your estimated payment vouchers automatically when you prepare your taxes using TurboTax.
• Keep a record of all your estimated tax payments: You will need to enter estimated taxes you have paid when you file your taxes.