Tax guide

Estimated Taxes

What are Estimated Taxes?

Estimated taxes are payments made every quarter by self-employed persons, to make sure their tax liability is covered throughout the year. Estimated tax payments are a sort of self-withholding: Instead of an employer withholding taxes and sending them on the taxpayer’s behalf, self-employed persons do it for themselves.

You don’t have to be self-employed to make estimated tax payments. Any taxpayer who has income sources that do not withhold taxes should consider making quarterly estimated payments in order to avoid an underpayment penalty.

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