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What Happens If You Miss an Estimated Tax Payment?

Amherst, NH Residents Asks for Help

For each month that your estimated tax payment is due, but not paid, the IRS charges a 0.5% penalty.  As the months go by, this penalty percentage will increase to a maximum of 25% of the taxes owed.  Quarterly estimated tax payments are due April 15th, June 15th, September 15th, and January 15th of the following year.  When the date falls on a weekend, the payment is due the following weekday.  A missed payment is seen by the IRS as an underpayment and is treated as such.

An Amherst resident realized that he had missed an estimated tax payment.  Concerned about the implications, he contacted the experts at Merrimack Tax Associates. 

Take Immediate Action to Pay a Missed Estimated Tax

Even if you are unable to pay the full amount, it is important to pay as much as you can as soon as possible.  This will reduce the owed tax money that is accruing interest and penalties.  If you are unable to pay the full amount, you should contact the IRS to set up a payment plan.  Even if you pay the full tax payment, you may receive a letter from the IRS indicated that penalties have been accrued. 

It can be tempting to just wait until the next estimated tax payment is due and add the amount missed into this payment.  However, this can cause you to incur even more penalties as the lack of payment is viewed as an under-payment and will be penalized given this scenario.

For Missed Payments, Apply to Waive the IRS Penalty

If you do miss an estimated tax payment you can submit a request to waive any penalty associated with this late payment.  To do so, you will need to submit IRS form 2210.  This should be accompanied by proof of why you were not able to make the payment.  This can include documents or records from a hospital, disability, insurance company, police records or other documentation. The Amherst resident did some damage control, promptly mailing in the missed payment.  While he may incur a penalty from the IRS, the damage will be minimized this way.

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