The fourth-quarter estimated tax deadline for 2024 is Jan. 15, and missing a payment could trigger “unexpected penalties and fees” when filing your return, according to the IRS.

Typically, estimated taxes apply to income without withholdings, such as earnings from freelance work, a small business or investments. But you could still owe taxes for full-time or retirement income if you didn’t withhold enough.

You could also owe fourth-quarter taxes for year-end bonuses, stock dividends, capital gains from mutual fund payouts or profits from crypto sales and more, the IRS said.    

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Federal income taxes are “pay as you go,” meaning the IRS expects payments throughout the year as you make income, said certified public accountant Brian Long, senior tax advisor at Wealth Enhancement in Minneapolis. 

If you miss the Jan. 15 deadline, you may incur an interest-based penalty based on the current interest rate and how much you should have paid. That penalty compounds daily.

Tax withholdings, estimated payments or a combination of the two, can “help avoid a surprise tax bill at tax time,” according to the IRS.

The threshold increases to 110% if your 2023 adjusted gross income was $150,000 or higher, which you can find on line 11 of Form 1040 from your 2023 tax return.

However, you could still owe taxes for 2024 if you make more than expected and don’t adjust your tax payments.

“The good thing about this last quarterly payment is that most individuals should have their year-end numbers finalized,” said Sheneya Wilson, a CPA and founder of Fola Financial in New York.

Massive wildfires are devastating the Los Angeles area of Southern California. As of Thursday morning, at least five people were killed, more than 100,000 residents have been ordered to evacuate and nearly 2,000 homes and businesses were destroyed.

Many people around the country, and world, want to help, whether by donating money or emergency supplies. However, there are already fundraising scams trying to capitalize on the crisis.

To make sure your funds get into the right hands, third-party evaluator Charity Navigator compiled a list of highly rated nonprofits currently engaged in relief and recovery efforts in the Pacific Palisades and the surrounding areas — including support for first responders. 

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“We’ve vetted the organizations that are there,” said Michael Thatcher, CEO of Charity Navigator. “These are all outstanding.”

Here are some of the groups that earned high marks from the organization for providing immediate support to the victims of the wildfires and wildfire-affected communities.

As a general rule, rather than follow a link in a text, email or on social media, go directly to a charity’s website or find a relief effort through a site such as Charity Navigator, BBB Wise Giving Alliance or CharityWatch, Thatcher said.

“There’s a safety element and a legitimacy element,” he said. “At the end of the day we want to make a difference to the people affected by this fire.”

The BBB Wise Giving Alliance also offers tips for donating to the California wildfire relief efforts.

It recommends donors check whether a charity is accredited and take extra precautions on crowdfunding sites, including reviewing how postings are screened as well what transaction fees may apply.

In addition, be wary of relief appeals that have vague descriptions or do not explain what programs your support will assist.

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Nearly 3 million individuals are poised to see their Social Security benefits increase, thanks to new changes signed into law by President Joe Biden this week. But with the higher checks could come additional tax burdens.

The Social Security Fairness Act — which passed by a bipartisan majority in both the House and Senate — ends reductions of Social Security benefits for certain individuals who also receive pension income from work in the public sector as firefighters, police officers, teachers and local, state and federal employees.

Those beneficiaries are set to see an increase to their monthly benefit checks. Because the legislation applies to benefits paid throughout 2024, they will also receive lump-sum payments to make up for that time.

The details of how those increases will be implemented are now being determined, according to the Social Security Administration.

In total, the benefit increases will cost $196 billion over a decade, according to the Congressional Budget Office. The additional outlay will move Social Security’s trust fund depletion dates six months closer. The program’s combined trust funds may pay full benefits until 2035, at which point just 83% of scheduled benefits may be payable, the program’s trustees projected last year.

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Additionally, about 380,000 spouses would see average benefit increases of $700 and 390,000 surviving spouses would see an average of $1,190 more, according to CBO’s estimates for December 2025.

Those beneficiaries were affected by the now-defunct Government Pension Offset, or GPO, which reduced Social Security benefits for spouses, widows and widowers who also receive their own pensions from public sector work.

The elimination of the provisions in many ways simplifies retirement income planning for affected beneficiaries, financial advisors say.

“For the people who are affected by this, you’re looking at a pretty significant increase, in many cases, of what their retirement income is going to be,” said Michael Daley, director of marketing at HealthView Services. “It’s good news for them.”

For financial planners and their clients, the challenge now is gauging how much of a benefit increase to expect and when to expect it, said Joe Elsasser, founder and president of Covisum, a Social Security claiming software company.

The extra income may also present some complications when it comes to affected beneficiaries’ taxes and Medicare premiums, experts say.

Those levies are determined based on a formula called combined income — the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.

Individuals pay taxes on up to 50% of their benefits if their combined income is between $25,000 and $34,000, or for married couples with between $32,000 and $44,000.

Individuals may pay taxes on up to 85% of their benefits if their combined income is more than $34,000; or for married couples with more than $44,000.

“Because Social Security benefits are taxed differently than everything else, people are going to really want to pay attention to their other sources of income,” Elsasser said of the anticipated benefit increases and lump sum payments.

For example, if a retiree has both a taxable account and traditional individual retirement account, they may want to prioritize withdrawals from the taxable account because only the gains would be taxed rather than the entire withdrawal, Elsasser explained. In the event the lump-sum payment of retroactive Social Security benefits is not distributed, they may take an IRA withdrawal later in the year.

For now, the agency recommends verifying that direct deposit and mailing address it has on file is still accurate. To update that information, the Social Security recommends changing it online or calling or visiting a Social Security office in person.

Some individuals may now become eligible for Social Security benefits for the first time, now that the WEP and GPO provisions have been eliminated.

To file for benefits, the Social Security Administration recommends either filing online or scheduling an appointment with the agency.