by Stephen Reed | Accounting News, IRS, News, Newsletter, Small Business, Tax, Tax Planning
If you’re self-employed or earn income without tax withholding, you’re likely required to pay quarterly estimated taxes. Missing these payments can result in penalties and interest charges from the IRS, but don’t panic—you have options to correct the situation and avoid bigger financial consequences. Here’s what you need to know about quarterly taxes, potential penalties, and how to get back on track.
Who Needs to Pay Quarterly Estimated Taxes?
The IRS requires individuals and businesses to pay taxes on income as they earn it. If you receive a steady paycheck from an employer, taxes are automatically withheld. However, if your income comes from self-employment, freelancing, gig work, rental properties, or investments, you must make estimated tax payments.
You generally need to pay quarterly taxes if you expect to owe at least $1,000 in taxes when you file your return. These payments are due on the following dates each year:
- April 15 (for income earned January–March)
- June 15 (for April–May)
- September 15 (for June–August)
- January 15 of the following year (for September–December)
Why People Miss Quarterly Tax Payments
Many individuals fail to make quarterly tax payments because they:
- Aren’t aware of the requirement. New freelancers and business owners may not realize they need to pay.
- Underestimate their income. If income fluctuates, it’s easy to miscalculate estimated taxes. Additionally, understanding tax laws and keeping up with changing regulations can cause added stress.
- Don’t have enough cash flow. Some businesses struggle with inconsistent revenue, and freelancers often live invoice-to-invoice.
- Forget the deadlines. Without reminders, it’s easy to overlook payment dates.
Regardless of the reason, missing payments can lead to IRS penalties and interest charges.
Penalties and Interest for Missed Payments
The IRS imposes various penalties and interest fees for missed or underpaid quarterly taxes. Here’s what you could face:
- Underpayment penalty. If you don’t pay enough throughout the year, the IRS may charge a penalty of 0.5% of the unpaid amount per month, up to 25% of the balance. When you complete your annual tax return, the underpayment will be reported, and the IRS will apply the penalty to the amount you owe.
- Late payment penalty. If you miss a deadline, you may owe an additional 0.5% per month until you pay in full.
- Failure-to-file penalty. If you don’t file a tax return on time, the penalty is 5% of the unpaid tax per month, up to 25%.
- Interest fees. The IRS also charges interest on unpaid taxes, which compounds daily until the tax is paid in full. It is 8% for tax year 2024.
What to Do If You Missed a Payment
If you’ve missed a quarterly payment, take action immediately:
- Calculate what you owe. Use IRS Form 1040-ES or an online tax calculator to estimate your outstanding balance.
- Pay as soon as possible. Even a partial payment can help reduce penalties and interest. The IRS accepts payments online at IRS.gov.
- File your tax return on time. Avoid additional failure-to-file penalties by ensuring your annual return is submitted before April 15.
- Request penalty relief. If this is your first time missing a payment, you may qualify for the IRS First-Time Penalty Abatement. You can also request a payment plan if you can’t pay in full.
How to Avoid Future Penalties
To prevent tax issues going forward, consider these strategies:
- Set aside taxes regularly. Allocate 20-30% of your income for estimated taxes.
- Automate your payments. Use the IRS’s Electronic Federal Tax Payment System (EFTPS) to schedule payments.
- Adjust your estimates. If your income changes, adjust your quarterly tax payments to avoid over- or underpaying.
- Work with a tax professional. An accountant or tax preparer can help you stay compliant and minimize tax liability.
by Stephen Reed | Accounting News, Industry - Retail & Distribution, News, Newsletter, Retail & Distribution
After a period of workforce reductions and aggressive cost-cutting measures, major retail companies are shifting toward optimization strategies—investing in technology, process improvements, and operational efficiencies that enhance productivity without sacrificing jobs. This shift streamlines costs and enables businesses to reinvest savings into growth initiatives, new revenue streams, and customer experience enhancements.
The Evolution of Cost-Cutting in Retail
To maintain profitability, the retail sector has long relied on cost-cutting measures, including layoffs, store closures, and supply chain adjustments. However, as labor markets tighten and consumer expectations rise, many retailers recognize that indiscriminate cost-cutting is no longer sustainable. Instead, forward-thinking companies are focusing on efficiency investments that reduce waste, optimize workflows, and improve margins without compromising workforce stability or customer satisfaction.
Efficiency Investments Driving Retail Optimization
Leading retailers are embracing a range of efficiency-enhancing technologies and process improvements, including:
- Artificial Intelligence and Automation
AI-powered solutions are transforming retail operations, from predictive analytics that optimize inventory management to automated tools that improve customer service by automating workflows, providing consistent responses, and reducing labor costs. Machine learning (ML) algorithms help retailers anticipate demand, minimize stockouts, and reduce excess inventory, leading to lower costs and higher profitability.
- Dynamic Pricing Strategies
Retailers are leveraging AI-driven dynamic pricing to adjust product prices in real time based on demand, supply, competitor pricing, and market trends. This allows businesses to maximize revenue while establishing competitive pricing and maximizing sales and profit margins without requiring layoffs.
- Supply Chain and Logistics Optimization
Investments in supply chain efficiency, such as automated warehouses, robotics, and improved logistics software, are helping retailers cut costs without sacrificing service quality. From streamlining distribution networks to improving last-mile delivery, companies can meet customer expectations while maintaining profitability.
- Process Automation in Store Operations
Retailers are adopting self-checkout systems, digital kiosks, and mobile payment solutions to enhance in-store efficiency. These tools improve customer experience and allow retailers to optimize labor allocation without reducing staff.
- Outsourcing and Strategic Partnerships
Instead of hiring full-time specialists, many retailers are outsourcing key functions such as marketing, IT support, and customer service. Strategic partnerships with third-party providers offer retailers solutions without the fixed costs of expanding their in-house teams.
Reinvesting Savings into Growth and Innovation
Rather than simply cutting costs, retailers are reinvesting savings into strategic initiatives that drive long-term growth. These include:
- Enhancing Customer Experience: Investments in personalized marketing, loyalty programs, and omnichannel integration are helping retailers build deeper relationships with customers.
- Expanding Product Offerings: Some companies are using efficiency savings to explore new product lines, private label brands, and subscription services.
- Digital Transformation: Many retailers are expanding e-commerce capabilities, investing in virtual shopping experiences, and leveraging data analytics for more informed decision-making.
by Stephen Reed | Accounting News, News, Newsletter, Tax, Tax Planning, Tax Planning - Individual, Tax Preparation - Individual
Tax season 2025 is here, and staying on top of important deadlines is essential for avoiding late fees and penalties. Knowing key dates like the federal income tax filing deadline, quarterly estimated tax payment due dates, and extensions can help you stay organized and stress-free. Read on as we go over these deadlines and provide tips to ensure your tax filing process goes smoothly.
When Are Taxes Due in 2025?
Federal income tax returns for the 2025 tax season are due by Tuesday, April 15, 2025. The extended deadline for U.S. taxpayers residing overseas to file and pay is June 16, 2025. The IRS determines the timeliness of your electronic return based on the date and time it is transmitted in your local time zone. For those filing paper returns, the IRS considers the submission on time if it is correctly addressed, includes sufficient postage, and is postmarked by the deadline.
E-filers must submit their returns no later than 11:59 p.m. local time to meet the deadline. Certain groups, including members of the military and individuals impacted by natural disasters, may qualify for automatic filing extensions. Always verify eligibility for extensions and meet filing requirements to avoid penalties.
Tax Refunds
According to the IRS, taxpayers who file electronically and opt for direct deposit can typically expect to receive their tax refund within 21 days of filing. However, if you submit a paper tax return, the processing time is significantly longer, with refunds often taking four weeks or more to arrive. Choosing e-filing and direct deposit is the fastest and most efficient way to get your refund quickly.
Penalties for Failing to File on Time
Failing to file your federal tax return by the deadline can result in a penalty of 5% per month on any unpaid taxes, up to a maximum of 24% of the outstanding balance. However, if you file your return but do not pay the full amount owed or have been granted an extension, you will generally incur a lower penalty of 0.5% per month on the unpaid taxes. Filing on time and paying as much as possible by the due date is crucial to minimize penalties and interest.
Tax Extension Deadline
Filing an extension by April 15, 2025, will extend your filing deadline to October 15, 2025. While an extension provides extra time to file your tax return, it does not extend the deadline to pay any taxes owed. The IRS requires you to pay the full amount—or a reasonable estimate—by the original due date of April 15, 2025. Failing to pay by this date will result in interest charges and penalties that continue to accrue until your outstanding balance is fully paid. To avoid additional costs, ensure you meet the payment deadline even if filing later.
Deadlines for W-2 and 1099 Forms
Employers must send W-2 forms by Jan. 31. Freelancers, independent contractors, and individuals earning income from non-traditional sources should expect a 1099 tax form by February 15. If you earn self-employment income or have side gigs, ensure you check for 1099 forms to accurately report your earnings and avoid potential tax issues.
Due Dates for Quarterly Taxes
If you earn income not subject to withholding taxes, such as from self-employment or freelance work, you’re generally required to make estimated tax payments to the IRS. These payments can be made quarterly or as a single annualized payment. The annualized payment is due by April 15, while the quarterly deadlines are as follows:
- First payment: April 15, 2025
- Second payment: June 16, 2025 (adjusted since June 15 is a Sunday)
- Third payment: September 15, 2025
- Fourth payment: January 15, 2026
Staying on top of these deadlines helps avoid interest charges and penalties for underpayment.
by Stephen Reed | Accounting News, News, Newsletter, Tax, Tax Planning
After Donald Trump’s win in November, taxpayers are wondering how a second Trump term could reshape U.S. tax policy. Trump’s first term saw sweeping changes under the Tax Cuts and Jobs Act (TCJA) of 2017. With key provisions of that legislation set to expire in 2025, Trump’s proposals offer a glimpse of his tax priorities. From significant individual tax cuts to business-friendly policies, here’s what you need to know.
The Expiration of the 2017 Tax Cuts
The TCJA lowered tax rates across the board, nearly doubling the standard deduction—which eliminated the need for itemized deductions—and capping the state and local tax (SALT) deduction at $10,000. These changes contributed to lower tax bills for many Americans. However, the individual tax cuts were temporary and are set to expire at the end of 2025 unless Congress acts to extend them.
If re-elected, Trump has indicated that extending or making these provisions permanent would be a top priority. Without an extension, taxpayers could see higher marginal tax rates, a reduced standard deduction, and the return of personal exemptions.
Removing the $10,000 SALT Deduction Cap
The SALT deduction, which allows taxpayers to deduct state and local taxes on their federal tax returns, became a testy issue after the TCJA imposed a $10,000 cap. This change particularly affected residents in high-tax states like New York, California, and New Jersey.
Trump has proposed removing the cap, a move that would benefit taxpayers in those states while potentially increasing the federal deficit. Critics argue that eliminating the cap would disproportionately benefit higher-income households, but supporters see it as a necessary adjustment to provide relief to middle- and upper-income earners in high-tax areas. Steven Moore, a senior economic advisor to Trump, recently floated the idea of doubling the cap to $20,000 as a potential compromise.
Eliminating Taxes on Social Security and Tip Income
Currently, up to 85% of Social Security benefits can be taxable, depending on your income level. Trump’s tax plan consists of eliminating these taxes, which would provide retirees with additional financial security. Trump has also floated the idea of eliminating taxes on tips, which would increase take-home pay and simplify tax compliance for hospitality and service industry workers. However, this proposal has sparked discussion over the potential impact on tax revenue and fairness in the tax code.
Reducing the Corporate Tax Rate
The TCJA decreased the corporate tax rate from 35% to 21%, which rendered the U.S. more competitive globally. Trump has suggested lowering the rate even more, potentially to 15%. Those in favor of this plan say that it could spur economic growth and encourage domestic investment, while critics are concerned about increasing the federal deficit.
Trump’s Tariffs
Trump has been clear on his stance on tariffs. During his first term, Trump imposed tariffs on various goods, particularly from China. Tariffs are not taxes in the traditional sense, but they can indirectly affect taxpayers by increasing the cost of goods and services. Businesses often pass these costs onto consumers, so households, particularly those in middle- and lower-income brackets, could feel the strain of tariffs.
by Stephen Reed | Healthcare, Industry - Healthcare, News, Newsletter
Independent healthcare practices face a range of challenges in managing payments and maximizing revenue, but recent developments in patient expectations and legislation provide fresh challenges and opportunities. Here’s how independent practices can leverage these changes effectively.
E/M Guideline Updates
Just this year, the Centers for Medicare & Medicaid Services (CMS) aligned its evaluation and management (E/M) coding guidelines with the changes adopted by the American Medical Association (AMA). This shift allows providers to bill for previously overlooked activities related to patient care, such as time spent reviewing patient records, consulting with other providers, and coordinating care.
This is a game-changer for independent practices. By optimizing E/M coding while adhering to the updated guidelines, practices can increase revenue and improve operational efficiency.
Practices will want to train staff on the new E/M coding guidelines to ensure compliance using tools like electronic health record (EHR) systems to streamline documentation.
Remote Patient Monitoring
Remote patient monitoring (RPM) enables providers to track patients’ health data remotely, allowing for early intervention and better chronic disease management. Beyond telehealth, incorporating remote patient monitoring tools for conditions like diabetes and hypertension can support patients in staying on course. Research indicates that patients who use monitoring devices consistently track health metrics. Moreover, the provider can better catch changes in a patient’s condition because data is automated, which means any changes necessitating scheduling an in-person appointment or adjusting medications could be noticed sooner.
By integrating RPM into practice operations, healthcare providers can reduce hospital readmissions, improve patient satisfaction, and qualify for additional reimbursements under Medicare and other payer programs.
Surprise Billing Legislation
It’s worth noting that the No Surprises Act, effective since 2022, protects patients from unexpected out-of-network bills. This includes emergency services and ancillary care provided by out-of-network providers at in-network facilities. While this primarily applies to hospital services, compliance from independent practices is vital to avoid penalties and maintain patient trust.
Independent healthcare practices can overcome payment challenges by staying ahead of industry changes. By leveraging updated E/M coding guidelines, adopting remote patient monitoring, and ensuring compliance with surprise billing legislation, providers can deliver exceptional patient care while maximizing revenue to secure their financial future.
