To simplify tax deadlines for self-employed people and business owners, Representative Debbie Lesko (R-Ariz.) recently introduced H.R. 4214, the Tax Deadline Simplification Act. This legislation is cosponsored by Reps. Brad Schneider (D-Ill.), David Schweikert (R-Ariz.), Ed Case (D-Hawaii).
Taxpayers not subject to withholding taxes, such as self-employed people and business owners, must make estimated tax payments each quarter to the Internal Revenue Service (IRS).
However, despite being called “quarterly payments” the dates do not coincide with calendar year quarters nor are they evenly spaced. These quarterly payments fall on January 15th, April 15th, June 15th, and September 15th. These uneven intervals make it more difficult for taxpayers to estimate the correct tax they owe, leading to potential noncompliance, or even overpayment.
Additionally, because the dates do not coincide with calendar year quarters, many taxpayers have trouble remembering each date. Disproportionately, this confusion affects self-employed workers, small businesses, and independent contractors. This needless complecxity an even lead to small business owners and independent contractors being subjected to costly scrutiny from the IRS and treated as if they were tax cheats.
Rep. Lesko’s bipartisan legislation, effective at the beginning of the next taxable year if passed, would set the estimated tax installment deadlines 15 days after the end of each actual calendar quarter: January 15th, April 15th, July 15th, and October 15th:
SEC. 2 QUARTERLY INSTALLMENTS FOR ESTIMATED INCOME TAX PAYMENTS BY INDIVIDUAL.
(a) IN GENERAL. – The table contained in paragraph (2) of section 6654(c) of the Internal Revenue Code of 1986 is amended –
(1) by striking “June 15” and inserting “July 15”, and
(2) by striking “September 15” and inserting “October 15”.
(b) EFFECTIVE DATE. – The amendments made by this section shall apply to installments due in taxable years beginning after the date of the enactment of this Act.
These changes would make it easier for taxpayers to estimate their tax burden and remember the payment dates, as it coincides with the calendar most business already operate under. All lawmakers should support this commonsense piece of legislation.