- If you or your spouse have received income that has not been subjected to withholding, you may or may not have to pay estimated taxes. The best way to determine whether you need to pay a quarterly estimated tax is to consult with a tax professional or accountant. IRS Publication 505 also gives different scenarios you can use to help decide if you need to file quarterly returns. Find a link in References.
As of 2009, the general rule is that if you expect to owe $1,000 or more for the tax year after subtracting your withholding and credits, and you expect your withholding and credits to be less than the smaller of either 90 percent of the tax shown on your current year's tax return or 100 percent of the tax shown on the previous year's tax return, you will probably be required to pay quarterly estimated income taxes. - If you determine that you need to file quarterly estimated tax returns, you must first calculate how much you owe. IRS Form 1040-ES has worksheets that walk you through the calculation process. Find a link in References. You will need to know your expected adjusted gross income (which is your income after allowable deductions such as retirement contributions and business expenses), your taxable income, taxes withheld, deductions, and credits for the year. You will also be required to make adjustments based on any changes to your situation or changes to the tax law. The worksheet will determine how much you need to pay for each estimated payment.
- There are four payment periods each year. The due dates are April 15 for the period of Jan. 1 to March 31, June 15 for the period of April 1 to May 31, Sept. 15 for the period of June 1 to Aug. 31, and Jan. 15 of the next year for the period of Sept. 1 through Dec. 1.
- If you have no income subject to estimated quarterly taxes during the first period, you do not have to pay the quarterly payment for that period. You start making payments during the first quarter of the year in which you have the required income, even if that isn't until the 2nd, 3rd, or 4th quarter.
If your situation changes throughout the year to where you are making significantly more or significantly less money than you initially estimated, you may have to adjust your payment amount. IRS Form 1040-ES has a worksheet for this situation. - You can pay your estimated taxes by crediting an overpayment on your previous year's taxes to this year's taxes. You can send your payment by check or money order with the payment voucher on Form 1040-ES. You can pay electronically when you file your yearly 1040 or 1040A electronically. You can also pay electronically by using the Electronic Federal Tax Payment System. Or, pay by credit card by phone or over the Internet.