As a small business owner, self-employed person or wage earner who may earn income not subject to tax withholding (i.e., your employer withholds tax from your paycheck), you may want to look into making quarterly estimated tax payments to help avoid unexpected tax bills or a penalty.

Typically, if one expects to owe $1,000 or more when filing their 2021 tax return, they need to make estimated tax payments. In addition to business owners and self-employed persons, sole proprietors, partners and S corporation shareholders are also expected to make tax payments. Corporations generally must make these payments if they expect to owe $500 or more on their 2021 tax return. Deadlines for paying 2021 estimated tax payments are September 15, 2019 and January 15, 2022.  All taxpayers are encouraged by the IRS to check their withholding using the Tax Withholding Estimator on IRS.gov. 

Anyone who pays too little tax via withholding or estimated tax payments or both may owe a penalty. The penalty may also apply if estimated tax payments are late and even if the taxpayer is due a refund.

For more information visit the IRS.gov website: What taxpayers need to know about making 2021 estimated tax payments.

Please be sure to contact a qualified tax advisor to properly handle how to file, report and make tax payments based on your particular situation.