What You Need to Know About Estimated Tax Payments

Who Needs to Pay Estimated Taxes

You may have to make estimated tax payments if you earn income that is not subject to withholding. Examples include incomes from the following: self-employment, interest, dividends, alimony, rent, realized investment gains, prizes, and awards.

You also may have to pay estimated taxes if your income tax withholding on salary, pension, or other income is not enough or if you had a tax liability for the prior year. Please consult a professional with tax expertise regarding your individual situation.¹

How to Pay Estimated Taxes

If you file as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual and expect to owe tax of $1,000 or more when you file a return, you should use Form 1040-ES, Estimated Tax for Individuals, to calculate and pay your estimated tax. You may pay estimated taxes either online, by phone, or through the mail.²

How to Figure Estimated Taxes

To calculate your estimated tax, you must include your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. Consider using your prior year’s federal tax return as a guide.

When to Pay Estimated Taxes

For estimated tax purposes, the year divides between four payment periods, each with a specific payment due date. The usual due dates are April 15, June 15, September 15, and January 15 of the following year. If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be due on the next business day.
For more information about estimated tax payments, contact a Hantzmon Wiebel team member.

Sources:
¹The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.

²IRS.gov

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