IRS Tax Tip 2021-81, June 8, 2021
Federal taxes are paid as earned. This means that people need to pay most of their taxes during the year, as they earn income. This can be done through withholding or estimated tax payments.
If the amount withheld from the taxpayer’s income or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, awards, and rewards, you may need to perform estimated tax payments. Self-employed taxpayers may also need to make estimated tax payments.
Adjust withholding tax for 2021
All taxpayers should review their federal withholding each year to make sure that too little or too much tax is withheld.
Employees, retirees, and the self-employed can use the IRS Withholding Tax Estimator to help decide whether to make a change to their withholding. This online tool guides users step-by-step through the process of verifying their withholding, and provides withholding recommendations to help achieve the desired refund amount when they file next year. Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Certificate of Employee Withholdings.
Make estimated tax payments
Estimated tax payments are another way that taxpayers can pay what they owe in separate payments, every four months. For tax year 2021, taxpayers must pay their remaining quarterly estimated taxes on June 15 and September 15, 2021, and January 15, 2022. The fastest and easiest way to make estimated tax payments is electronically. Through Direct Payment or The Electronic Federal Tax Payment System. Taxpayers can visit IRS.gov for other payment options.
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