As a small or mid-sized business in Texas, timely decisions are essential to achieving long-term success. The easiest way to protect your bottom line and avoid costly surprises is by staying on top of your quarterly taxes. The next estimated deadline is quickly approaching–and our team at Badger CPA is here to help you navigate complex tax planning and tax compliance. Learn more about how the IRS handles missed or late payments to avoid unnecessary penalties.
Upcoming Estimated Key Tax Deadlines
Knowing key tax deadlines can mean the difference between smooth financial sailing and unexpected IRS fees for business owners, contractors, and individuals with variable income. If you anticipate owing $1,000 or more in federal income taxes this year, the IRS generally requires quarterly tax payments. Make sure to keep track of these dates to stay ahead of your tax obligations:
- Q1: April 15, 2025 – income earned January 1–Mar 31
- Q2: June 16, 2025 – income earned April 1–May 31
- Q3: September 15, 2025 – income earned June 1–August 31
- Q4: January 15, 2026 – income earned September 1–December 31
Understanding an IRS Penalty
How To Know How Much You Owe The IRS
The IRS will charge a penalty to taxpayers who do not meet their tax obligations. It is structured to mitigate noncompliance by encouraging timely filing and payment. These charges are in addition to the taxes you already owe, and can significantly increase your liability if not addressed quickly. The IRS sends notices or letters in the mail–or electronically if opted in–to tell you about the penalty, reason for the charge, and next steps.
These are a few of the primary penalties for which the IRS will issue notices:
- Failure to File: not filing your tax return by the due date.
- Failure to Pay: not paying taxes owed by the due date.
- Underpayment of Estimated Tax (Corporation): occurs when you don’t pay estimated tax accurately or on time.
- International Information Reporting: IRS requirement for U.S. taxpayers to disclose certain foreign financial accounts and financial activity.
What Happens If You Miss An IRS Payment?
If you have already missed the Q1 and Q2 estimated tax deadlines, the key is to act now to minimize penalties and stay on track for the rest of the year. The IRS is likely to issue:
- Late tax payment penalties: a percentage of the unpaid amount
- Interest charges: based on current IRS interest rates, which are adjusted quarterly
The sooner you respond, the more you can reduce potential penalties and interest.
How to Avoid Penalties After Q1 & Q2
1. Make a Catch-Up Payment ASAP
Even though the deadlines have passed, the IRS still encourages you to make payments as soon as possible. Doing so can help minimize late payment penalties and reduce the interest that accrues daily on underpaid amounts. Consider submitting a payment that covers what you should have paid in Q1 and Q2 based on your income during those periods. Payment methods include:
- EFTPS (Electronic Federal Tax Payment System)
- IRS Direct Pay
- IRS2Go mobile app
- Check or money order
2. Recalculate Your Year-to-Date Income
If your income so far this year has been lower than expected, you may not owe as much as you think. Reassess your actual earnings through June 30 and estimate the tax due accordingly. This may reduce the amount of underpayment and penalty.
3. Adjust Q3 and Q4 Payments
To avoid further penalties, adjust your Q3 and Q4 estimated tax payments to cover any remaining liability for the year. This may mean increasing your next payments to make up for earlier shortfalls.
4. Consider Annualized Income Installment Method
If your income has been uneven (e.g., you earned more recently), the IRS allows you to calculate estimated taxes based on when the income was actually received. This can reduce or eliminate penalties for earlier quarters. We can help determine if this method is appropriate for you.
Keep an Eye on Safe Harbor Rules
To stay compliant and penalty-free, the IRS allows you to meet what’s known as a ‘safe harbor.’ What is a safe harbor? It’s a rule that protects taxpayers from underpayment penalties if they pay either:
- 100% of your previous year’s total tax liability, if your income is relatively stable, or
- 90% of your current year’s expected tax liability, if your income has increased
Using these guidelines can help ensure your estimated payments are sufficient throughout the year.
Pro Tip: Set automated reminders for quarterly deadlines to avoid a last-minute rush.
Why Local Expertise Matters
When you’re searching for the “best CPA San Antonio” or “accounting firms San Antonio,” you’re ideally looking to get more than number crunching. You want a partner who understands Texas tax nuances, state filing requirements, and local business challenges. From tax planning support to outsourced accounting, our team ensures every detail is covered.
Our experienced team offers:
- Personalized tax planning to minimize liability
- Outsourced accounting services for year-round compliance
Specialized CPA services San Antonio TX, for industries like construction, government contracting, and professional services.
Smart Tax Planning in Texas
The Right Tax Accountant Near Me
If you have any questions about your estimated taxes or need help calculating your quarterly payments, our team is here to help. Planning now can save you from surprises later. We deliver solutions that save you time, stress, and money. Schedule your tax planning consultation today.