The federal income tax is a pay-as-you-go tax. You must pay
taxes as you earn or receive income throughout the year. If you
earn income that is not subject to withholding, you will likely
need to make estimated tax payments each quarter of the tax
Tax is generally withheld from wages, salaries, pensions,
unemployment compensation and other types of income before you
You can avoid making estimated tax payments by ensuring you are
having enough tax withheld from these types of income before you
receive it. See Form
W-4 Withholding for more information.
If you owed additional tax last year, you may have to make
estimated payments in for this year. You must pay estimated taxes
Farmers and fishermen who expect to receive at least two-thirds
of their gross income from farming or fishing activities may pay
estimated tax in one installment.
Income from wages received as a farm employee are not considered
farm income. Gross income from farming is derived from cultivating
soil or raising agricultural commodities. This income includes:
Gross income from fishing is derived from catching, harvesting,
cultivating or farming any kind of fish, crustacean, sponge,
seaweed, shellfish or other form of aquatic vegetable or animal
life. This income includes:
To estimate the amount of tax you will owe, you must determine
your expected adjusted gross income, taxable income, tax liability,
credits for the current tax year.
If your adjusted gross income exceeds $150,000, or $75,000 if
status is married filing separately, you must make payments of
at least 110% of your prior-year tax liability. This rule does not
apply to farmers and fishermen.
If you do not pay enough taxes through withholding and estimated
payments, you may be subject to underpayment penalty.
The combined total withholding and estimated payments you make
each quarter should be no less than 25% of either:
Payments should be mailed with Form 1040-ES.
The first payment is due by April 15 of the current year. The
remaining three payments are due by June 15 and September 15, and
then January 15 of next year. If the due date falls on a Saturday,
Sunday or legal holiday, the due date is the next business day. If
you do not make your estimated payments by the due date, you may be
subject to penalty.
For more information see IRS