The 3rd quarter has started, and by the time it ends, it’s best to estimate what you will owe to IRS in taxes. The 3rd quarter tax period starts from the first day of July and ends on the last day of August. There are no differences between any of the quarters as far as the payments are concerned. You are obligated to pay how much you owe for the quarter.
One important thing to know when paying estimated taxes is that each quarter is like your annual tax bill. You must pay at least 90 percent of your tax liability. If you end up underpaying the 3rd quarter taxes but make up the difference in the next quarter, you will be subject to underpayment penalties still. Make sure that you pay every quarter’s estimated taxes fully.
Paying 3rd quarter’s estimated taxes
As mentioned, there is no difference between the 3rd quarter and any other quarters of the tax year. The 3rd quarter’s last day to pay taxes is 15 days after the quarter ends, October 15. If you miss the deadline, you’ll have to pay a minor late payment penalty on top of what you owe in taxes. Aside from the late payment penalty, make sure that you pay your estimated taxes in full. You might be subject to penalties that can put you in trouble with the Internal Revenue Service. It’s always better to overpay taxes than not pay in full.
Payment channels – EFTPS
As for how to pay the 3rd quarter’s estimated tax payments, there are different payment channels. Our favorite way to pay taxes is through Electronic Federal Tax Payment System from the Treasury, EFTPS, as you directly pay from your bank account to the Internal Revenue Service. It doesn’t have any fees and offers a great way to track your previous payments to keep up with your annual tax bill.
Another way to pay taxes is through Direct Pay where you pay taxes directly using your bank account on the IRS website. It’s also a great way to pay estimated taxes but doesn’t offer the extra features the EFTPS does. If you’re looking for a quick and easy way to pay estimated tax payments, Direct Pay is probably the best option for you. We highly recommend taxpayers who usually don’t pay estimated taxes use Direct Pay as EFTPS won’t be all that necessary.
Other payment methods – Best for credit card payments
If you want to pay estimated taxes or any other tax payment for that matter using your credit card, the best way to do it is using one of the electronic payment processors. There are currently three electronic payment processors that accept payments from debit cards and credit cards. These payment processors are as follows.
The above payment processors charge fees. The fees are subject to change generally depending on what month of the year you make your payment. The fee for debit cards is fixed, around $2 and $4 per transaction whereas it’s a certain percentage of the payment credit card.
These payment processors work with the Internal Revenue Service, so they are completely legit to use and your information won’t be at risk.