Help - I haven't paid any quarterly taxes this year

[Joey60]

I've always had sufficient tax withholding to cover my primary job, my side gig, and dividends.  But I retired last year and this year, I've had no tax withholding.  I expect my Taxable Income this year from my side gig and dividends to be about $80K.  Can I catch up?  What should I do right now?  I'm willing to overpay some now to avoid a penalty.

[Loretta P]

You are correct, you will need to make estimated tax payments to cover your retirement, side gig and dividends.  You may want to start having withholding taken out of your retirement payments.  

You will need to calculate what your estimated tax will be for 2024 and the subtract what has been submitted so far as withholding.  The balance left after subtracting withholding would be the amount you want to submit as estimated tax payments.  You would then submit your 3rd and 4th quarter estimated payments to cover this amount.  You can submit your estimated payments online at the IRS website or you can print the estimated voucher and mail it to the IRS with a check or money order.

TurboTax's Tax Caster tax calculator is a good tool to help you estimate your 2024 tax bill or if you may get a refund. 

How to Estimate Federal Withholding will assist you in determining what amount if any you would like to have withheld from your retirement payments.

Here are some helpful links with additional information on how and when to make estimated payments.

Estimated Taxes: How to Determine What to Pay and When 

When to pay estimated tax

[Mike9241]

the only way to avoid penalties for the first 3 quarters would be to have enough withheld from your pension to cover either

1) 90% of your 2024 taxes 

2) 100% of 2023 tax (110% if your 2023 adjusted gross income was over $150,000)

under the tax laws regardless of when withholding actually occurs you can either allocate it evenly throughout the year or specuifically for the period paid

[GreenOak]

As I understand your question, it is now September, and you did not pay quarterly estimated tax at the April 15 and June 15 intervals. Is that the case?  Even if you pay in a full “make-up” at this date, you are facing a penalty amounting to an interest charge on the missed payments.

 Here is an end run around this situation. You mentioned you are retired. This says to me that you are over 59 1/2 years old.  You have an option, available to you until Dec 31 of your tax year, to order your IRA custodian to send withheld tax payment direct to the IRS.  The IRS considers payment made even in the 12th month to have been paid timely for the year.