When Are Q4 Estimated Taxes Due?

For many small business owners, the tax year isn’t over yet. There’s still one more estimated tax payment, so to start 2024 off on the right foot, I want to remind you about the January 16 deadline and set the tone for estimated tax payments coming in the new year.

Now, here are the deadlines from Q4 of the past season to Q4 of the coming season:

• Q4 2023 (Sep 1 – Dec 31): January 16, 2024.
• Q1 2024 (Jan 1 – Mar 31): April 15, 2024.
• Q2 2024 (Apr 1 – May 31): June 17, 2024.
• Q3 2024 (Jun 1 – Aug 31): September 16, 2024.
• Q4 2024 (Sep 1 – Dec 31): January 15, 2025.

Note that Q2 is two months, and Q4 is four months. Business owners are people of habit, so stay tuned to irregularities.

Here’s a quick reminder of the rationale for estimated tax payments.

Referring to quarterly tax payments as “check-ins” with the Internal Revenue Service (IRS) may be glib, but it’s useful. Quarterly tax payments follow a “pay-as-you-go” model because they apply to taxable income directly taxed absent withholdings, e.g., self-employment taxes, interest, dividends, capital gains, and alternative minimums.

The upside is that, in some cases, estimated taxes are overestimated. And remember, you don’t need to pay more in quarterly estimated tax payments than the previous year if you have already paid as much as the total taxes you owed that year. See my article on the safe harbor rule for more information.

Let’s brush up on how to calculate estimated tax payments.

Your estimated tax bill is based on your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. The IRS offers guidance through Form 1040-ES¹, complete with worksheets to help you estimate your taxes accurately. But you shouldn’t be filling out worksheets if you’re reading this.

Plan and budget for quarterly payments.

Let’s continue to be proactive with our quarterly tax obligations. It doesn’t matter whether business is up or down; trajectories can change. So, budget, budget, and budget.

Of course, I’d recommend seeking out the services of a Certified Public Accountant (CPA). Still, if you’re a shareholder or partner in an LLC, for example, you may choose to assume responsibility for your personal tax obligations. It’s a matter of preference. Consider utilizing tools like Quicken or Quickbooks’ home and personal accounting software² to create a budget that matches your estimated tax liability. Check on your estimated tax payment via the IRS website³.

Again, your CPA or accountant will be there to provide you with a number. Word to the wise: If your CPA doesn’t consider your business a priority, take the initiative. Get straight answers well before it’s time to pay. Also, find a new CPA.

Choose the payment method that is easiest for you.

When it comes to paying your quarterly estimated taxes, you have options. Each payment method works fine. Pick the one that best suits you.

• IRS Direct Pay is ideal for quick one-time electronic payments directly from your bank account.
• The Electronic Federal Tax Payment System (EFTPS) requires more set-up but opens up scheduling quarterly tax payments in advance.
• Mail still appeals to many folks, and there’s nothing wrong with sending a check or money order. Just ensure mail is postmarked by the due date.

Explore these options on the IRS payment page⁴ to find what works best for you.

Note: Avoid payment plans, if possible. We can talk about payment plans in a later article; take my word for now.

Handle estimated tax payments so you can focus on big-picture items.

As you head into the new year and the next tax season, estimated quarterly taxes should not distract you from more significant issues like improved tax planning and accounting practices.

Here are four takeaways:

1. Q4 taxes are due January 16th, 2024. Pay today.
2. Keep track of the important dates and requirements.
3. Choose the payment method that aligns with how you plan and manage estimated payments.
4. When in doubt, talk to a professional.

Let’s get Q4 taken care of and look forward to this coming tax season. Remember, tax strategy is a tool to mature and grow your business, so there’s reason to be excited. I am. If we’re not working together, we should be.

Let me see what I can do to lower your tax bill. Schedule a discovery call, and we’ll get a plan together.

Talk soon,
Jeremy A. Johnson, CPA

References

1. Internal Revenue Service. An official website of the United States government [Internet]. About Form 1040-ES, Estimated Tax for Individuals | Internal Revenue Service; [cited 2023 Dec 13]. Available from: https://www.irs.gov/forms-pubs/about-form-1040-es
2. QuickBooks®: Official Site | Smart Tools. Better Business. [Internet]. Home & Personal Accounting Software | QuickBooks; [cited 2023 Dec 14]. Available from: https://quickbooks.intuit.com/accounting/home-accounting/.
3. Internal Revenue Service | An official website of the United States government [Internet]. Estimated taxes | Internal Revenue Service; [cited 2023 Dec 14]. Available from: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes.
4. Internal Revenue Service | An official website of the United States government [Internet]. Payments | Internal Revenue Service; [cited 2023 Dec 15]. Available from: https://www.irs.gov/payments.