Yes, an extension of time to file is not an extension of time to pay. Interest for underpayment will apply for each day the tax payment (balance due) is paid late.
You can figure out your marginal tax rate and send a payment if you believe you will owe money. Check your taxable income on line 15, Form 1040 and use that to see your tax rate. The distribution will be taxed at that rate. Next compare that to the amount of your withholding on the tax return to see the actual balance due, if applicable. Review the rules below to see if you need to send any money now.
- Marginal Rates: For tax year 2021, the top tax rate remains 37% for individual single taxpayers with incomes greater than $523,600 ($628,300 for married couples filing jointly). The other rates are:
- 35%, for incomes over $209,425 ($418,850 for married couples filing jointly);
- 32% for incomes over $164,925 ($329,850 for married couples filing jointly);
- 24% for incomes over $86,375 ($172,750 for married couples filing jointly);
- 22% for incomes over $40,525 ($81,050 for married couples filing jointly);
- 12% for incomes over $9,950 ($19,900 for married couples filing jointly).
- The lowest rate is 10% for incomes of single individuals with incomes of $9,950 or less ($19,900 for married couples filing jointly).
Who Must Pay the Underpayment Penalty
In general, you may owe the penalty for 2021 if the total of your withholding and timely estimated tax payments didn't equal at least the smaller of:
1. 90% of your 2021 tax, or
2. 100% of your 2020 tax. Your 2020 tax return must cover a 12-month period.
NOTE: Higher income taxpayers.
If your adjusted gross income (AGI) for 2020 was more than $150,000 ($75,000 if your 2020 filing status was married filing separately), substitute 110% for 100% in (2) above.
@Be4Him
[Edited: 02/23/2022 | 12:08p PST]
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