Here's What Happens When You Skip an Estimated Tax Payment

One nice perk of being a salaried employee is having taxes withheld from your earnings every pay period. In other words, if a $2,000 paycheck hits your checking account, that $2,000 is yours to spend. You don't have to allocate a portion of it for tax purposes because your taxes have already been covered for that pay period.

When you're self-employed, things work differently. You're required to pay the IRS taxes as you earn money, but those taxes won't be deducted from your wages off the bat. Rather, you'll have to pay them on a quarterly basis.

As an example, let's say you receive a $2,000 check for doing work for a given client. That $2,000 isn't all yours to keep, because the IRS is entitled to a portion of it. Only you don't have to send money to the IRS every single time you get paid. That could end up being cumbersome. Instead, you have to send the IRS a payment every quarter.

If you don't make estimated tax payments, you could face penalties from the IRS. So it's important to mark the due dates of those payments on your calendar.

When are estimated quarterly tax payments due in 2023?

For the 2023 tax year, estimated tax payments are due on:

• April 18 (which was the annual tax-filing deadline)
• June 15
• Sept. 15
• Jan. 15, 2024

The reason your final payment for the year is due in mid-January of next year, as opposed to Dec. 31, is that you might get paid for some of the work you do in 2023 on Dec. 31. From there, you'll need to calculate your income for the quarter and year to see what your estimated tax payment amounts to. And it may not be reasonable to do that within a day. As such, the IRS gives you more time to make your payment.

You might also notice that there's only a two-month gap between when the first quarterly tax payment is due this year and when the second needs to be submitted. The IRS could conceivably make it so that second quarter taxes are due in mid-July and third quarter taxes are due in mid-October -- but it doesn't. Keep these dates in mind so you don't get confused.

Aim to make each payment on time

Skipping an estimated quarterly tax payment could cost you money in the form of a penalty, so it's best to be timely with your payments. The IRS even says on its website that you "may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return."

Now if you don't remember to make an estimated tax payment on time, your best bet is to send it in as soon as you remember. The IRS will accept a payment from you at any time -- you don't need to wait until the next quarter's deadline. Paying your estimated taxes sooner rather than later could help keep your penalties to a minimum if you miss the official deadline.