Articles · Basics · Individual Income Tax and Form 1040
Estimated Tax Payments: Who Pays and When
The U.S. tax system is pay-as-you-go. People whose income is not subject to enough withholding usually make quarterly estimated payments using Form 1040-ES.
Who needs to pay
Estimated payments are common for the self-employed, investors, landlords, and retirees. In general, an individual should pay if they expect to owe at least $1,000 after withholding and credits.
Due dates
For calendar-year individuals, payments are generally due April 15, June 15, September 15, and January 15 of the next year. When a date falls on a weekend or holiday, it moves to the next business day.
Safe harbors
The underpayment penalty can generally be avoided by paying at least 90% of the current year's tax, or 100% of the prior year's tax. The prior-year figure rises to 110% for higher-income taxpayers.
Income that arrives unevenly can be handled with the annualized method on Form 2210, which may reduce or remove a penalty. Workers can also increase withholding instead, because withholding is generally treated as paid evenly through the year.
Key takeaways
- Plan for four payments a year.
- Safe harbors are based on current or prior-year tax.
- Extra withholding can substitute for estimates.
For general education only, not tax advice. Tax law changes often, so confirm current rules and amounts with primary sources.