IRS Penalties and Interest for Underpayment or Late Tax Payments on 1040

This is an important notice regarding recent increases in IRS penalties and interest for underpayment of estimated taxes and late tax payments. To help you avoid unnessary charges in future tax years, please review the following updated guidance:

1. Quarterly Estimated Payments:
   We strongly recommend making estimated payments on a quarterly basis throughout the year to prevent interest and penalties. The estimated tax payment due dates:

   •             1st Quarter: April 15, 2025

   •             2nd Quarter: June 16, 2025

   •             3rd Quarter: September 15, 2025

   •             4th Quarter: January 15, 2026

2. Tax Payment Deadline:
   If you expect to owe $1,000 or more for 2025, you must pay at least 110% of your prior year's tax liability or 90% of your current year's tax liability by April 15. An extension to file until October 15 does not extend the time to pay - any tax due must still be paid by April 15.
3. Interest and Penalties:
   Failing to pay on time may result in approximately 8% interest plus a 6% late payment penalty per year- a combined estimated rate of about 14% of any underpaid amount.