Hello PINKNation,
Great question!
The quick response is that the IRS can charge you penalties and late fees for not paying your quarterly taxes on time.
The IRS acts as a "pay as you go" system. Meaning that you should be making some type of quarterly estimated tax payments during the year.
The IRS has stated that there are in increasing number of people/taxpayers that end up having to pay estimated tax penalties. This happens when a taxpayer does not pay enough in taxes during the year. For a self-employed person, it happens when the person doesn't pay enough in taxes during the year. The penalty amount is dependent on several factors, and the amount levied can be several hundreds dollars.
The IRS states "Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments."
For more information about estimated taxes, please feel free to review the following IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
It is encouraged to make estimated tax payments every three months with the IRS.
Thanks,
Sean
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