Estimated Tax Payments —heard of them, but not quite on your radar? Should they be? With a couple of new gigs under your belt, the question arises: should you be handling this every quarter? If navigating tax matters isn't your forte, fear not—we've got you covered. Let’s break down estimated tax payments together.
If you're an individual, including sole proprietors, partners, or S corporation shareholders, and you anticipate owing $1,000 or more in taxes when you file your return, you'll likely need to make estimated tax payments. For corporations, the threshold is $500 or more.
Individuals and certain entities typically use Form 1040-ES to calculate estimated tax. Nonresident aliens use Form 1040-ES(NR). To figure out your estimated tax, you'll need to project your adjusted gross income, taxable income, potential taxes, deductions, and credits for the year. A good starting point is to refer to your prior year's income, deductions, and credits from your federal tax return. You can use the worksheet provided in Form 1040-ES to assist in your calculations.
The tax year is divided into four payment periods, each with its specific due date. Missing these deadlines may result in penalties, even if you're owed a refund upon filing your tax return. Here are the due dates for estimated tax payments:
There are various methods to pay estimated taxes
We understand that taxes might not be your passion, but they're ours. Say goodbye to uncertainties about filing deadlines and account status. Trust TaxNow to be your dedicated tax account assistant. We'll ensure you stay informed about deadlines, updates to your tax account, and beyond. Sign up today and take control of your tax data!
