Information provided by IRS.gov

The Internal Revenue Service has issued a reminder to self-employed individuals, retirees, investors, businesses, corporations, and others who pay their taxes quarterly that the payment for the first quarter of 2021 is due Thursday, April 15, 2021.

The extension to May 17, 2021 for individuals to file their 2020 federal income taxes does not apply to estimated tax payments. The 2021 Form 1040-ES, Estimated Tax for Individuals, can help taxpayers estimate their first quarterly tax payment.

Income taxes are pay-as-you-go. This means, by law, taxes must be paid as income is earned or received during the year. Most people pay their taxes through withholding from paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

Most often, those who are self-employed or in the sharing economy need to make estimated tax payments. Similarly, investors, retirees and others often need to make these payments because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony, and rental income. Paying quarterly estimated taxes will usually lessen and may even eliminate any penalties.

Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year.

How to pay estimated taxes

Form 1040-ES, Estimated Tax for Individuals includes instructions to help taxpayers figure their estimated taxes. Visit IRS.gov/payments to pay electronically and for information on payment options. If paying by check, be sure to make the check payable to the “United States Treasury.”