Not Making Estimated Payments
Estimated quarterly payments throughout the year may be required if you are going to owe money come tax time. This applies not only to the self-employed and freelancers but also to taxpayers who may receive income from other sources not subject to withholding, like your investment account. But making payments ahead of time seems so bothersome. Can't you just pay at the end of the tax year?
Likely consequence: The IRS imposes a penalty for taxpayers who are required to make estimated payments and fail to do so. It's important to try to file by the applicable deadlines (generally, April 15, June 15, Sept. 15 and Jan. 15, for the previous three months) since those penalties are imposed on each underpayment according to the number of days the tax remains unpaid. If you are going to owe less than $1,000, don't worry about it. And if the additional taxes you owe are the result of a one-time thing, you won't run into a problem with the IRS. But repeat offenders will find themselves shelling out payments for interest and underpayment penalties on Tax Day.