Instead of paying quarterly Can I pay the total estimated tax for year 2024 on January 2025? Is there any penalty?
No, you cannot pay your total estimated tax for the entire year of 2024 all at once in January 2025 without potential penalties. The IRS generally requires estimated tax payments to be made on a quarterly basis throughout the year (April, June, September, and January for the following year).
If you miss these quarterly deadlines and don't pay on time, you may be subject to penalties for underpayment, even if you ultimately pay the full amount in January 2025. The IRS calculates penalties based on the amount of tax due and how late the payment is, and they can apply interest and charges for any underpayment during the year.
However, there are exceptions to penalties if your total tax due is below a certain threshold or if you paid withholding that covered your estimated payments. It’s a good idea to check the IRS Form 2210 (Underpayment of Estimated Tax) or consult a tax professional to see if you qualify for any exceptions or safe harbor provisions.
