If you missed a quarterly estimated tax payment, here are some steps you can take:
Make the Payment as Soon as Possible: Even if it’s late, making it as soon as possible will help reduce any potential penalties and interest. The IRS may charge a penalty for underpayment of estimated taxes, which is calculated based on the amount of the underpayment, the period it was due, and the interest rate
Calculate Penalties and Interest: The IRS imposes penalties and interest on late payments. The penalty is typically 0.5% of the unpaid amount for each month or part of a month that the payment is late, up to a maximum of 25%. Interest is calculated based on the federal short-term interest rate plus 3%, compounded daily.
Adjust Future Payments: If you missed a payment, you might need to adjust your remaining estimated payments to cover the shortfall. This can help minimize penalties. You can use IRS Form 1040-ES to calculate and adjust your future payments
File Your Tax Return on Time: When you file your annual tax return, you can report the missed payment and any penalties. Filing on time can help avoid additional penalties.
Consider Setting Up a Payment Plan: If you’re unable to pay the full amount, you can contact the IRS to set up a payment plan. This can help you manage your tax liability over time.
Review Your Withholding: If you have a regular job or have set up optional withholding on clergy income, you might want to adjust your withholding to cover your tax liability more accurately. This can help prevent underpayment in the future.
If you need more specific advice, it might be helpful to contact Pro Advisor Support to answer your questions.
Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR | Consulting
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (888) 421.0101
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (888) 421-0101Â
Fax: (888) 876-5101
Email:Â clientservices@clergyfinancial.com