Understanding When Deferred Taxes Are Due and Payment Options

Deferred taxes can be a complex and confusing topic, but understanding when they're due can make a big difference. In the United States, deferred taxes are typically due on April 15th of each year.

You should receive a Form 1040 with your tax return to report deferred taxes, and you may also receive a Form 5329 to report any additional taxes owed. This is usually the case when you have a deferred tax liability from a previous year's tax return.

If you're unable to pay your deferred taxes on time, you have options to consider, such as making a payment arrangement with the IRS. This can help you avoid penalties and interest on your deferred taxes.

On a similar theme: What Is 1099 Tax Form

Deferred tax payments can be a bit tricky to navigate, but don't worry, I've got you covered.

Employers who deferred paying the employer portion of social security taxes between March 27, 2020 and December 31, 2020, will receive reminder notices from the IRS. These notices will remind them to pay 50% of the deferred amount by January 3, 2022.

The IRS is issuing reminder notices for each quarter the employer portion of social security taxes were deferred, which means employers who deferred amounts in all four quarters of 2020 may receive up to four reminder notices.

You can begin repaying the deferred amounts at any time, and payments or deposits made before December 31, 2021, will be applied against the employer's payment due on January 3, 2022, and then against the employer's payment due on December 31, 2022.

Employers can make a payment through the Electronic Federal Tax Payment System (EFTPS) or by credit, debit card, money order, or check. To be credited properly, the IRS advises making a separate payment for deferred taxes.

Here's a summary of the payment schedule:

Self-employed individuals and employers who deferred paying part of their 2020 Social Security tax obligation must make a payment by January 3, 2022, even if they never received a bill from the IRS.

To repay deferred taxes, employers and individuals can make a payment through EFTPS, choosing "Deferred Social Security Tax" as the tax type and selecting the applicable tax period.

Deferred property tax payments can be a big help for senior citizens. The state program allows qualifying homeowners to defer up to $7,500 a year in property taxes.

To be eligible, homeowners must be at least 65 years old by June 1 of the year they apply and have an annual household income of $65,000 or less. This means that many older homeowners may be able to take advantage of the program.

The program works like a loan, where the state pays the property taxes and charges 3% simple annual interest. For example, if a homeowner defers $2,000 in property taxes, they would owe the principal amount plus $60 after a year.

Deferred taxes must be repaid immediately upon the sale or transfer of the property, or within a year of the taxpayer's death. This ensures that the state gets repaid for the deferred taxes.

To apply for the program, first-time applicants must provide proof of age, and applications for 2025 will be available after January 1 and must be submitted by March 1.

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