Are Estimated Taxes Still Due Despite the Government Shutdown?
Don’t think you can skip your January 15, 2019 estimated tax payment, for 2018’s fourth quarter, just because IRS employees are furloughed.
The IRS might be partially shut down, but you can’t use that as an excuse for missing a tax payment. For millions of Americans, that means you still have to pay your final 2018 estimated tax payment by January 15, 2019.
Our tax system operates on a “pay-as-you-go” basis, which means the IRS wants its cut of your income when you earn it. For employees, the government gets paid through tax withholding each time you get a paycheck. If you’re self-employed, it’s up to you to periodically pay the IRS by making estimated tax payments – they’re generally due April 15, June 15, and September 15 of the tax year, and January 15 of the following year.
Whether you make estimated tax payments or rely on withholding, you could be hit with a penalty if you don’t pay enough tax throughout the year. The penalty doesn’t apply if you owe less than $1,000 in tax. You can also avoid the penalty if your withholding or estimated tax payments equal at least 90% of your tax due for the current year, or 100% of the tax shown on your return for the prior year.
Individuals use Form 1040-ES to calculate and pay estimated taxes. There are a number of ways to pay estimated taxes, including by check, cash, credit card, and debit card. There are many online payment options, too, such as the Electronic Federal Tax Payment System (EFTPS). The various payment methods are described in the instructions for Form 1040-ES.
Finally, don’t forget about your state, whose tax collectors aren’t affected by the federal government shutdown anyway. Unless you live in a state with no income tax, you probably owe estimated tax payments to your state, too. Due dates for state payments may or may not coincide with the federal dates, so be sure to check with the appropriate tax agency in your state.