How do I know if I have to file quarterly individual estimated tax
payments?
Estimated tax payments can be used to pay Federal income tax, self-employment
tax, and household employment tax. To estimate if you need to pay tax on income
not subject to withholding or on other income from which not enough tax is
withheld, you need to calculate if the total tax you'll owe on your annual
income tax return will be covered by the amount of tax you have already had
either:
withheld from wages and other payments, or
paid in earlier estimated payments for the year, or
credited to your account from adjustments or overpayments to previously
filed returns.
Generally, you should make estimated tax payments if you will owe tax of
$1,000 or more, after withholding and credits, and the total amount of tax
withheld and your credits will be less than the smaller of:
90% of the tax to be shown on your current tax return, or
100% of the tax shown on your prior year's tax return, if your prior year's
tax return covered all 12 months of the year. However, if your prior year's
adjusted gross income exceeded $150,000, or $75,000 if you filed a separate
return from your spouse, then you must pay 110% instead of 100% of last year's
tax. (Note: the percentages change depending on the tax year. Refer to Publication 505, Tax Withholding and Estimated Tax.)
Estimated tax requirements are different for farmers and fishermen. Publication 505, Tax Withholding and Estimated Tax, provides more information
about these special estimated tax rules and about estimated tax in general.
Get Form 1040-ES (PDF), Estimated Tax for
Individuals, to help you figure your estimated tax liability for 2004.
Do self-employment taxes need to be paid quarterly or yearly?
Self-employment tax is paid by making quarterly estimated tax payments
which include both income tax and social security tax.
When are the quarterly estimated tax returns due?
Your first estimated tax payment is usually due the 15th of April. You
may pay the entire year's estimated tax at that time, or you may pay your
estimated tax in four payments. The four payments are due April 15th, June
15th, September 15, and January 15th 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 on time if you make it on the
next day that is not a Saturday, Sunday, or legal holiday. For example, a
payment due Saturday, January 15, 2005 will be on time if you make it by Tuesday
January 18, 2005. Note: Monday January 17, 2005 is a legal holiday.
How do I report the estimated payments I have made when I file my
taxes at the end of the year?
Take credit for all your estimated tax payments for 2004 on line 64 of Form 1040 (PDF), U.S. Individual Income Tax Return, or
line 40 of Form 1040A (PDF) , U.S. Individual
Income Tax Return.
