Forgot last two estimated tax payments

Forgot last two estimated tax payments
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#1

Just realized I haven’t made the June and September payments. Never been that late before, maybe a few days or a week so I could back date a check and there was no problem. The amounts aren’t too large, mid 3 figures, but do I send one check for the 2 missed payments? Or 2 checks with the 2 payment slips? And is there some online service that will email you a week in advance when a payment like this is due?


#2

Are you subject to withholding, for example via your paycheck or perhaps from retirement account withdrawals? Withholdings aren’t late and treated as evenly made throughout the year regardless of when you actually withhold them during the calendar year, so they’re an easy way to avoid underwithholding payment penalties. Don’t forget that if you withheld 100-110% of your prior year’s tax liability (not the amount due in April, the total), there’s a safe harbor for the Feds that will avoid any underwithholding penalties as long as you pay any amount due by Apr 15th. State taxes are often less forgiving in that front (lower safe harbor amounts and higher interest rate on penalties), so you may want to pay them too and sooner.

If you normally make estimated quarterly payments and have fallen behind for whatever reason, you can always just send them more money now and that will reduce any interest charges. However it might be worth thinking about if you can take care of the issue via withholding instead.

In answer to your estimated questions, one check/slip is fine - it’ll just get counted towards the quarter when they receive it. Cron or your calendar or your phone can probably handle the reminders - your choice.


#3

Nope, no withholding. Is Chron an email notification service? Googled it an didn’t see anything.


#4

We just paid ours a few weeks late. Dunno what’s going to happen with that, if anything…


#5

Sorry, it’s Cron (typo). It’s a unix software tool.


#6

Not sure if you have a cell phone, but if you do, it’s probably running iOS or Android and both have calendar programs. You can set a calendar event for when the quarterly payments are due.


#7

Well sure I do, but mostly for phone calls, so if I miss the call I may not know about it. With an Email message, I may check messages on my computer 10 times a day so would never miss a notification.


#8

If email is your jam, then try this service out. I have no experience with it but have heard about it for several years. You can send yourself an email if you put your email address in the TO field.


#9

That looks good, thanks.


#10

Other option is to just make all of your quarterly payments when the first one comes due - if you’re talking about small amounts you’re not losing much in opportunity cost and you get the mental freedom of not having to worry about it for another year.


#11

I use boomerang all the time. It works great. It can be annoying sometimes if you use multiple computers regularly as I do, where you keep getting popups on login to enable the browser plugin.


#12

I’m using a combination of google calendar and gmelius for reminders.

For things that I know the date for I use gcal. I’m disciplined enough to check it daily now, but you can set email notifications per event too.

For everything else the gmelius (gmail extension) snooze feature is very powerful, it hides an email for a set amount of days (that you define) so if I don’t wanna see some email reminder, I can snooze it for 2 weeks.


#13

I’ve never received any penalty for late paying small estimated tax payments when I used to file in April . As long as I made all the payments by April they didn’t really care if they were all lumped together at the end .

Of course if you also filed an extension till October and didn’t pay all the payments by 4/15 there will be a bill. I’ve been filing in October recently , to monitor changes in obamacare and income limits - and I haven’t been paying my full tax bill before 4-15, so I get a small additional tax bill for interest / penalties a few weeks after my October filing .


#14

I use Google calendar and set an email reminder in the event. It works well for everything, bills, TV shows, etc.


#15

First, if you get a bill for the penalties, they’ll be very small. I wouldn’t calculate the penalties on your own return, you have an option to let the IRS calculate any penalties. It’s not even worth your time to fill it out even if you think the IRS will get the calculation wrong.

With regard to automating estimated payments, if you want it to actually be automated and not just a reminder - if you have a tax preparer you can send automated payment instructions for the upcoming year with your prior year return. I’m not sure exactly how it works, but you can pick whatever dates you want the funds to come out of your bank account. Maybe you can do this with something like Turbotax as well.

Other than that, maybe see if your bank offers some service to automatically send payments. Some business accounts do, but not sure about personal accounts.


#16

Is it still a fact that you shouldn’t use your bank’s billpay for these payments?


#17

I set them all up in advance using EFTPS. Have never had a problem.


#18

I personally do not, and would not. Pretty unlikely the money would disappear, but I’d say not particularly unlikely it wouldn’t be applied correctly at first. Then you have to spend time on the phone and wait for some payment tracing team to search for it.

I would rather just not make that $4k in estimated payments and pay the penalty than waste time getting them to try to find it.


#19

To second (actually at this point I think it’s third or fourthing) what others have said:
For such a small amount don’t waste your time making estimated payments and just pay the underpayment penalty.

It seems that underpayments penalties vary year to year in a way where they’re designed to make it slightly unfavorable for you to leave the money in a savings account instead of sending it to the IRS quarterly. Back when savings accounts were paying 4%+ there was sense in making your estimated payments on time to avoid the penalty (which was a large percentage than it currently is), but in recent years it’s been so small that it’s just not worth the effort to avoid it.


#20

This.