estimated tax payments
The IRS requires estimated tax payments if you expect to owe $1,000 or more when filing your return and your withholding and refundable credits are less than:
-
90% of the tax you owe for the current year, or
-
100% of the tax you owed for the previous year (or 110% if your adjusted gross income exceeds $150,000, or $75,000 if married filing separately).
These payments are typically necessary if you have income not subject to withholding, such as self-employment earnings, rental income, or investment income.
how to make estimated tax payments
Determine Your Estimated Tax Liability: Calculate your expected annual tax liability based on your income, deductions, and credits.
​
Set Up a Payment Schedule: Estimated taxes are typically paid quarterly. Mark the deadlines on your calendar to ensure timely payments: April 15, June 15, September 15, and January 15 of the following year.
​
Choose a Payment Method: You can pay estimated taxes online, by mail, or through a tax payment app.
​​
Keep Records: Save copies of your payment confirmations and any correspondence for your records.
Adjust As Needed: Review your estimated tax payments periodically. If your income or deductions change significantly, adjust your payments to avoid underpayment penalties or overpayments.
Need assistance with estimated tax payments?
Let L & M Tax Plus take care of it. Contact us for more details.