How & When To Pay Any 2021 Tax Due with Your US Tax Return
We are a week away from April 18, 2022, the US tax payment deadline. If you are a US taxpayer outside of the United States on April 18, 2022, you will receive an automatic tax-filing deadline through June 15, 2022. Important! This is an extension to file, NOT an extension of time to pay.
Should I Consider Making a Payment?
Consider making a payment if any of the following apply to your 2021 situation:
· Significant increase in any type of income (wages, interest, dividends, capital gains, self-employment income, etc)
· You had a balance due in 2020 and have not made any estimated tax payments
· You moved to a country with tax rates that are lower than US tax rates
How Much Should My Payment Be?
Review your previously filed US tax return (2020), and if there were no significant income or foreign tax changes you can safely use 110% of the total tax due in 2020 to make a payment now.
If your situation changed significantly in 2021, work with your tax preparer or run a simulation using tax software to better estimate your 2021 tax liability.
How Can I Make My Payment?
• Online, via IRS.gov/payments, this is the easiest method and allows you to pay by US bank account, debit or credit card
• Check or Money Order through the mail (not recommended due to the current IRS backlog)
What If I Overpay the IRS?
Making an overpayment now will result in a refund or credit, you can choose to:
• Receive a refund via check
• Receive a refund via US bank account direct deposit (recommended)
• Have your overpayment applied to the 2022 tax year (recommended)
State Tax Considerations
The Federal & US State tax authorities are separate. If you recently moved abroad or have US state-sourced income, you may need to consider making a separate estimate tax payment to the state. Federal overpayments made to the IRS will not transfer to a state tax balance.
Estimated Tax Payments
If you owe a balance in 2021 this is a great time to be thinking about making 2022 estimated tax payments. The first 2022 estimated tax payment is due on April 18, 2022, the remaining payments are due as follows:
· June 15, 2022
· September 15, 2022
· January 17, 2023