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Estimated taxes

JAW1965

In your year end tips you said:

Make your 4th quarter state estimated tax payment in December instead of January.

I thought that even if you make the payment in January of 2024 the estimated tax payment is still for 2023 and will be used in the tax return for 2023. I am unclear why you made this statement in your year end tips.

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sinn_7

Thanks for the clarification.

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RBorch

The payment periods for tax year 2023 are April 18th, June 15, Sept. 15th, and January 16th, 2024. If you choose to make your 4th quarter payment by the January due date it will be considered on time. You can read more about estimated payments on the IRS link I have provided below, scroll down to page 23. https://www.irs.gov/pub/irs-pdf/p505.pdf

sinn_7

So what is the "benefit" to making the last payment in December 23, rather than January 24?

GerhardtQ

Please note that our 'Year End Tip' refers to a '4th quarter state estimated tax payment'. We recommend that taxpayers make estimated payments for their state taxes in December so they can claim the payment for an itemized deduction on their federal tax return for the year. The itemized deduction for tax payments made to states only applies to those made during the calendar year, thus if you make your state estimated tax payment in January 2024, you'd have to wait to itemize the payment on your federal return for 2024.

sinn_7

Thanks for the clarification.