The U.S. earnings tax is a pay-as-you-go system. The regulation requires most workers and self-employed enterprise house owners to pay no less than 90% of their taxes lengthy earlier than the April due date.
This yr, the due date for 2021 tax returns for many taxpayers is April 18, 2022 (April 19 for residents of Maine and Massachusetts). Submitting deadlines may additionally be delayed for victims of federally declared disasters. Taxpayers can request a six-month extension to file their returns, however that doesn’t delay the requirement to pay what they owe.
What’s the penalty for underpayment?
With some exceptions, tax underpayments incur penalties based mostly on present rates of interest. Lately this charge was 3%. To keep away from these penalties, workers and plenty of retirees usually have taxes withheld from paychecks or Social Safety and pension funds over the course of the yr.
Guidelines for enterprise house owners
Self-employed enterprise house owners and others who don’t have withholding as an alternative make quarterly estimated funds of their taxes based mostly on earnings for that quarter. For 2021, the deadlines for quarterly funds have been April 15, June 15, Sept. 15 and Jan. 18, 2022. The deadlines for 2022 are April 18, June 15, Sept. 15, and Jan. 17, 2023. Tax funds made after the deadlines however earlier than the April due date assist to cut back penalties.
Are unemployment advantages taxed?
Many People additionally acquired unemployment compensation in 2021. These funds are taxable, and in contrast to in 2020 there isn’t a partial exemption. Recipients ought to count on to obtain a Type 1099-G for the full that’s being reported tothe IRS.
SHARE YOUR THOUGHTS
What has your expertise been with withholding and tax funds? Do you usually owe or obtain cash after submitting your taxes? Be part of the dialog beneath.
The IRS has posted a calculator to assist workers make withholding choices, and it has been up to date for 2022.
For extra data on withholding and estimated taxes, see IRS Publication 505.
This yr’s tax deadline for most people is April 18. Enthusiastic about understanding extra earlier than you file your taxes? Register here to read the WSJ Tax Information 2022.
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