

Here we go, the start of the 2025 tax year. The IRS has announced January 27, 2025, is the start of the filing season. The IRS has multiple updates that taxpayers, if relevant, should consider.
Final 2024 quarterly estimated tax payment due Jan.15
Last day - January 15, 2025
Today is the last day to make quarterly estimated tax payments. These estimates are for 2024 taxable income, assuming assumed tax rates, deductions, and credits from federal and state tax laws. Are you prepared? If you haven’t paid any estimated taxes throughout 2024, you can make a payment toward your estimated 2024 taxes with minimal penalties by the due date.
What are estimated taxes?
According to the IRS publication 505, estimated taxes is the method used to pay tax on income that isn’t subject to withholdings. This includes income from self-employment, interest, dividends, rent, gains from the sale of assets, prizes, and awards. It's the amount of income tax that’s withheld from your salary, pension, or other income.
Penalties
In some situations, when a taxpayer hasn’t made any estimated tax payments throughout the year. The taxpayers are penalized when preparing and filing the current year's tax return. A penalty is imposed on the number of days it remains unpaid. A penalty may be applied if the estimated tax for the year wasn’t paid or the taxes were underpaid.
Taxpayers who do not have to pay estimated taxes
Taxpayer owe less than $1,000 in tax after subtracting their withholding and refundable credits
If the taxpayer paid withholdings and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.
Exceptions to Tax Penalty
The IRS does understand taxpayers have their season, and that’s why there are exceptions.
The required payment was never sent to the IRS because of a casualty event, disaster, or other unusual circumstance, and it would be inequitable to impose the penalty
Retired (after age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.
If you are employed, you may be able to avoid having to make estimated tax payments on your other income by asking your employer to take out more taxes from your income. File or adjust form W-4, Employee’s Withholding Certificate, with your employer to possibly avoid making estimated tax payments.
A Message to Taxpayers
Every year, individuals are misguided or forget to make estimated payments. Tax planning at the beginning of the year or discussing with your accountant
when filing can eliminate unnecessary fees that can be prevented for future tax seasons. If you are a taxpayer, take the time to understand the tax return after it is complete; this may save you from unnecessary penalties down the road.
California Wildfire Victims Tax Relief

We must admit this has been a rather rough year so far. California, particularly the Los Angeles area, is undergoing the worst forest fires in history. Many people have lost everything and have to rebuild from the bottom.
The IRS has announced that individuals affected by the wildfires have until October 15, 2025, to file returns and pay any taxes originally due during the period.
Individuals or businesses can claim uninsured or unreimbursed disaster-related losses on either the return for the year the loss occurred or the return for the prior year (2024).
Reference: See Publication 547, Casualties, Disasters, and Thefts, for details.
Disaster Retirement Funds
For individuals affected by major disasters, the SECURE 2.0 Act provides direction on accessing their retirement savings.
Eligible Taxpayers
A taxpayer may be eligible for relief that provides for expanded access to their retirement funds if their principal residence was in a major disaster area and they sustained an economic loss due to that disaster. An economic loss includes, but is not limited to:
Being displaced from the taxpayer’s principal residence.
Loss or damage to or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other causes.
Lost income due to temporary or permanent layoff.
Use the tool on Fema.gov/disaster to find a current list of major disaster declarations
Types of relief
May withdraw up to $22,000 from an IRA or other eligible retirement plan.
The Amount can be exempt from the 10% early distribution tax.
Taxpayers may repay to a retirement plan or IRA within three years of the distribution.
The distribution may be included equally in income over three years.
A retirement plan may offer increased loan limits and delay repayments.
Link for more information
References:
IRS tax tips. (2025, January 13). IRS Newswire. Retrieved 2025, from irs@service.govdelivery.com.
IRS tax tips. (2025, January 10). IRS Newswire. Retrieved 2025, from irs@service.govdelivery.com.
IRS tax tips. (2025, January 7). IRS Newswire. Retrieved 2025, from irs@service.govdelivery.com.
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