Taxes

Third quarter estimated tax payment due Sept. 16

Online tools at IRS.gov help people stay current

WASHINGTON – With major tax reform now in its second year and taxpayers seeing its full effect on 2018 returns, the Internal Revenue Service today reminded people who pay estimated tax that their third quarter payment for 2019 is due Monday, Sept. 16.

The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, fundamentally changed the way tax is calculated for most taxpayers, including those with income not subject to withholding. By making quarterly estimated tax payments, however, people can better stay up to date with their taxes throughout the year.

Who needs to pay quarterly?

Most often, self-employed people, including many involved in the sharing economy, need to pay quarterly installments of estimated tax. Similarly, investors, retirees and others often need to make these payments as well. That’s because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony and rental income.

Special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year.

Taxpayers can avoid an underpayment penalty by owing less than $1,000 at tax time or by paying most of their taxes during the year. Generally, for 2019, that means making payments of at least 90% of the tax expected on their 2019 return. 

Taxes are pay-as-you-go

This means taxpayers need to pay most of their taxes owed during the year as income is received. There are two ways to do that:

  • Withholding from pay, pension or certain government payments such as Social Security; and/or
  • Making quarterly estimated tax payments during the year.

As a result of tax reform or a recent life change such as marriage, many taxpayers may need to raise or lower the amount of tax they pay each quarter through the estimated tax system.

Tax Withholding Estimator

This new and improved tool is now more mobile friendly and replaces the Withholding Calculator on IRS.gov. The new design makes it easier for everyone to do a Paycheck Checkup and have the right amount of tax withheld during the year. The estimator offers workers, as well as retirees, self-employed individuals and other taxpayers a clear, step-by-step method for effectively tailoring the amount of income tax they should have withheld from wages and pension payments.

The IRS urges everyone to use the estimator as soon as possible to make any potential tax withholding adjustments while there is still ample time in 2019. To help people do that most effectively, the IRS is holding a free two-hour webinar on Thursday, Sept. 19 at 2 p.m. Eastern time. Among other things, the webinar will feature step-by-step instructions on how to use the new estimator and a live question-and-answer session. To sign up, visit the webinar’s page on IRS.gov. 

Other IRS.gov resources

  • Form 1040-ES, available on IRS.gov, is designed to help taxpayers figure estimated tax payments simply and accurately.
  • IRS Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, which can help taxpayers determine whether they should pay estimated tax.
  • The “Pay” tab on the front page of IRS.gov provides complete tax payment information, how and when to pay, payment options and more. 

The fourth and final 2019 estimated tax payment is due Jan. 15, 2020.

Taxpayers can go to IRS.gov for answers to questions about payments and penalties

Questions about tax payments and penalties come up all year long. Taxpayers can find most answers to these questions on IRS.gov. They can head over to the Let Us Help You page, which features links that take users to information and resources on a wide range of topics related to penalties and payments.

Payments

Payment options

  • This page lays out the different way taxpayers can pay what they owe, from having the payment taken directly from their bank account to using a credit card.

Payment plan

  • Taxpayers who cannot pay what they owe in full have options, which are explained on this page.

View your balance and payment history

  • Individual taxpayers can use this tool to check their account and see things like their payoff amount.

Liens and levies
These links explain what a lien and a levy are, and how taxpayers comply with them.

Resolve a dispute
The Office of Appeals is an independent organization within the IRS that helps taxpayers resolve their tax disputes. This page has links to information that will help taxpayers who received a notice saying their case qualifies to be reviewed by Appeals.

Prevent future tax bill
Taxpayers who owed more than expected when they filed this year have a couple options to help them avoid that when they file next year. These pages have more info about the options.

Penalties
These links take the user to information where they can find out more about topics related to penalties and penalty relief.

Share this tip on social media

Treasury and IRS issue proposed regulations and provide relief for certain tax-exempt organizations


WASHINGTON — The Internal Revenue Service today issued proposed regulations clarifying the reporting requirements generally applicable to tax-exempt organizations. 

The proposed regulations reflect statutory amendments and certain grants of reporting relief announced by the Treasury Department and the IRS in prior guidance to help many tax-exempt organizations generally find the reporting requirements in one place.

Among other provisions, the proposed regulations incorporate the existing exception from having to file an annual return for certain organizations that normally have gross receipts of $50,000 or less, which is found in Revenue Procedure 2011-15. The regulations also incorporate relief from requirements to report contributor names and addresses on annual returns filed by certain tax-exempt organizations, previously provided in Revenue Procedure 2018-38.  A recent court decision held that the Treasury Department and the IRS should have followed notice and comment procedures in 2018 when announcing this relief with respect to providing contributor names and addresses, and these regulations provide the opportunity for notice and comment on that relief as well as on other proposed updates to existing regulations.

Under the proposed regulations, filing requirements for Section 501(c)(3) organizations and Section 527 political organizations remain unchanged, and all organizations are required to keep the contributor information and make it available to the IRS upon request.
 
Treasury and IRS welcome public comments on all aspects of these proposed regulations. For details on submitting comments, see the proposed regulations. The regulations propose to allow tax-exempt organizations to elect to apply the regulations to returns filed after Sept. 6, 2019.
 
Additionally, the IRS issued Notice 2019-47 providing penalty relief for certain exempt organizations that, consistent with the 2018 guidance from the IRS, do not report the names and addresses of contributors on annual returns for tax years ending on or after Dec. 31, 2018, but on or before July 30, 2019. 

Taxpayers with expiring ITINs should renew them now

Taxpayers with expiring individual taxpayer identification numbers should renew their number ASAP. There are nearly 2 million ITINs set to expire at the end of 2019. Taxpayers with an expiring number should renew before the end of this year. This will help avoid unnecessary delays related to their tax refunds next year.

ITINs are used by taxpayers required to file or pay taxes, but who aren’t eligible for a Social Security number.

Here’s info about which ITINs will expire and how taxpayers renew them.

  • These ITINs expire on Dec. 31, 2019:
    • Those not used on a federal tax return at least once in the last three consecutive years.
    • Numbers with middle digits 83, 84, 85, 86 or 87 not already renewed.
  • ITINs with the middle digits 83, 84, 85 or 86, 87 need to be renewed, even if it was used it in the last three years.
  • Taxpayers whose ITIN is expiring and who expect to have a filing requirement in 2020 must renew their number. Others don’t need to take any action.
  • The IRS is sending notices to affected taxpayers. This is a CP48 Notice. It explains the steps to renew the ITIN.
  • Taxpayers who receive the notice after renewing their ITIN don’t need to take further action unless another family member is affected.
  • ITINs with middle digits of 70 through 82 have previously expired. Taxpayers with these ITINs can still renew at any time, if they haven’t already.
  • Those who receive a renewal letter from the IRS can renew the family’s ITINs together. They can do so even if family members have an ITIN with middle digits that aren’t expiring. Family members include the tax filer, spouse and any dependents.
  • To renew an ITIN, a taxpayer must complete a Form W-7 and submit all required documentation. They don’t need to attach a tax return. However, taxpayers must note why they need an ITIN on the W-7.
  • There are three ways taxpayers submit the renewal application:

Here’s what taxpayers should know about making 2019 estimated tax payments

Small business owners, self-employed people, and some wage earners should look into whether they should make estimated tax payments this year. Doing so can help them avoid an unexpected tax bill and possibly a penalty when they file next year.

Everyone must pay tax as they earn income. Taxpayers who earn a paycheck usually have their employer withhold tax from their checks. This helps cover taxes the employee owes. On the other hand, some taxpayers earn income not subject to withholding. For small business owners and self-employed people, that usually means making quarterly estimated tax payments.

Here’s some information about estimated tax payments:

  • Taxpayers generally must make estimated tax payments if they expect to owe $1,000 or more when they file their 2019 tax return.
  • Whether or not they expect to owe next year, taxpayers may have to pay estimated tax for 2019 if their tax was more than zero in 2018.
  • Wage earners who also have business income can often avoid having to pay estimated tax. They can do so by asking their employer to withhold more tax from their paychecks. The IRS urges anyone in this situation to do a Paycheck Checkup using the Tax Withholding Estimator on IRS.gov. If the estimator suggests a change, the taxpayer can submit a new Form W-4 to their employer.
  • Aside from business owners and self-employed individuals, people who need to make estimated payments also includes sole proprietors, partners and S corporation shareholders. It also often includes people involved in the sharing economy.
  • Estimated tax requirements are different for farmers and fishermen.
  • Corporations generally must make these payments if they expect to owe $500 or more on their 2019 tax return.
  • Aside from income tax, taxpayers can pay other taxes through estimated tax payments. This includes self-employment tax and the alternative minimum tax.
  • The final two deadlines for paying 2019 estimated payments are Sept. 16, 2019 and Jan. 15, 2020.
  • Taxpayers can check out these forms for details on how to figure their payments:
  • Taxpayers can visit IRS.gov to find options for paying estimated taxes. These include:
  • Anyone who pays too little tax through withholding, estimated tax payments, or a combination of the two may owe a penalty. In some cases, the penalty may apply if their estimated tax payments are late. The penalty may apply even if the taxpayer is due a refund.
  • For tax year 2019, the penalty generally applies to anyone who pays less than 90 percent of the tax reported on their 2019 tax return.

Smart Vault

Please specify the group
Best of York 2017
Need FAQ, Info or Help? Ask us about...

The Affordable Health Care here.

Local IRS Offices

York
2670 Industrial Hwy, York, PA 17402
Monday-Friday 8:30am - 4:30pm
(Closed for lunch 12:30pm - 1:30pm)
(717) 757-4977

Harrisburg
228 Walnut St, Harrisburg, PA 17101
Monday-Friday 8:30am - 4:30pm
(Closed for lunch 12:30pm - 1:00pm) (717) 777-9650

Lancaster
1720 Hempstead Rd, Lancaster, PA 17601
Monday-Friday 8:30am - 4:30pm
(Closed for lunch 12:30pm - 1:00pm)
(717) 291-1994










NATP

National Association of Tax Professionals