Estimated Tax Payments Laws and Regulations
Know your tax liabilities by learning about estimated tax payments laws and regulations
It's critical for all individuals and businesses to have a thorough understanding of estimated tax payments laws and regulations. All sole proprietors, partners, members of a limited liability company and S corporation shareholders are responsible for paying and reporting estimated taxes on their income. It’s important to note that if you’re obligated to make federal estimated tax payments, you may also be required to pay state estimated tax.The general rule for estimated tax payments is that you are required to pay your taxes as you earn income. If you haven’t paid enough taxes by tax filing time, you may be assessed a penalty for underpayment. To help you learn more about estimated tax payments laws and regulations, you should:
1. Determine if you’re required to make estimated tax payments.
2. Learn about deadlines for estimated tax payments.
3. Obtain information on how to make estimated tax payments.
Research guidelines on estimated tax payments
Whether or not you'll need to make estimated tax payments depends upon the amount of taxes you expect to owe after deducting any federal income tax withholding amounts. It's important to note that estimated tax payments were previously required to be a minimum of 100 percent of your tax liability for the previous year to avoid tax penalties. However as a result of the American Recovery and Reinvestment Act of 2009, you may be safe by only paying 90 percent of your previous year tax liability if your income is primarily derived from a small business.
Try: Visit Turbo Tax to read more about the criteria used in determining if you will be responsible for making estimated tax payments. Read more about the American Recovery and Reinvestment Act of 2009 guidelines on estimated tax payments by checking out the National Small Business Association.
Obtain information on due dates for estimated tax payments
Estimated tax payments are made quarterly. For individuals, the payments must be received by April 15, June 15, September 15 and January 15. Estimated tax payments for corporations are due on different dates depending on how they set their tax year. For tax years ending on December 31, the dates are April 15, June 15, September 15 and December 15 and for tax years ending on June 30, the dates are October 15, December 15, March 15 and June 15.
Try: For the definitive word on estimated taxes, see the Internal Revenue Services Publication 505 for individuals and Publication 542 for corporations. Learn more about estimated tax payments by visiting H&R Block.
Make estimated tax payments via phone, Internet or mail
The U.S. Department of Treasury allows businesses and individuals to make estimated tax payments conveniently via the Electronic Federal Tax Payment System (EFTPS). The system is free and allows users to make tax payments via the Internet or phone any time of the day. Businesses and individuals can schedule payments weekly, monthly or quarterly and also make payments in advance using EFTPS. When mailing estimated tax payments, you'll need to use Tax Form 1040-ES.
Try: Learn more about making estimated tax payments via phone or Internet by visiting EFTPS. Read more about mailing estimated tax payments by checking out Fairmark.
- If you receive a significant amount of investment income during one tax year, you may not be required to make estimated tax payments even though you owe taxes for that particular year. To learn more about this and other exceptions for making estimated tax payments, you may consider consulting with a tax professional.
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