The Internal Revenue Service (IRS) has issued a reminder that April 18 is the deadline for first quarter estimated tax payments for the tax year 2023.
Individuals and businesses that do not have taxes withheld or do not have enough taxes withheld by their employers throughout the year must make these payments.
This includes self-employed individuals, retirees, investors, corporations, and others.
Income taxes in the US are paid on a pay-as-you-go basis, which means taxes must be paid as income is earned or received during the year.
Estimated tax payments help individuals and businesses avoid penalties by ensuring they pay taxes on income not subject to withholding, such as interest, dividends, capital gains, alimony, and rental income.
Form 1040-ES, Estimated Tax for Individuals, provides instructions for calculating estimated taxes, and payments can be made electronically through the IRS website.
The IRS urges taxpayers to use its Tax Withholding Estimator tool to ensure the right amount of tax is withheld from their paychecks.
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