5 Important Facts to Know if You Failed to Pay Estimated Taxes in 2024

The due date for the final quarterly installment of estimated tax payments for the 2024 tax year was January 15, 2025. If you are behind on your estimated tax payments, what do you need to know? Find out from Virginia IRS lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

What U.S. Taxpayers Need to Know About Non-Payment of Estimated Taxes

Here are five important facts to know if you failed to pay estimated taxes for the 2024 tax year:

1. Federal Income Taxes in the U.S. Are “Pay-As-You-Go”

Under the Internal Revenue Code, federal income taxes are “pay-as-you-go.” This is why most people have federal taxes withheld from their paychecks—and it is why those who don’t have taxes withheld need to make estimated tax payments on a quarterly basis.

2. The Obligation to Make Estimated Payments Applies to Multiple Types of Federal Taxes

While most taxpayers need to pay estimated taxes to meet their federal income tax obligations, the obligation to make estimated payments applies to multiple other types of federal taxes as well. These include self-employment tax and the alternative minimum tax (AMT), among others. As a result, before you decide what to do next, you should make sure you have a clear and comprehensive understanding of your total delinquent federal tax liability.

3. Penalties and Interest Begin to Accrue Immediately

If you fall behind on your federal estimated tax obligations, penalties and interest begin to accrue immediately (including interest on your penalties). As a result, the sooner you take action to resolve your situation, the less you will owe to the IRS.

4. You Could Be Eligible for Penalty Relief

Regardless of how much you owe, you could be eligible for penalty relief from the IRS. Penalty relief is available to both individuals and businesses—although individuals have more options. In some cases, securing relief can involve avoiding penalties entirely. In others, it can involve mitigating the amount you owe as a result of your delinquency.

5.  You Could Have Other Options for Mitigating Your Liability

Regardless of whether you are eligible for penalty relief, you could have other options for mitigating your liability as well. For example, if you cannot afford to pay what you owe, you may be eligible to submit an offer in compromise to the IRS. Negotiating an installment agreement, seeking currently-not-collectible status and submitting a voluntary disclosure could all potentially be options as well.

Regardless of which option makes the most sense for your specific circumstances, you will want to engage an experienced Virginia IRS lawyer to help you deal with the IRS. This is a high-risk scenario, and if you make mistakes, you could end up triggering an audit or investigation.

Request a Confidential Consultation with Virginia IRS Lawyer Kevin E. Thorn

If you need to know more about how to deal with the IRS if you failed to pay estimated taxes in 2024, we invite you to get in touch. Please call 703-752-3752 or contact us online to request a confidential consultation with Virginia IRS lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.