What taxpayers need to know about making 2022 estimated tax payments Internal Revenue Service

Do not include Social Security numbers or any personal or confidential information. We do not control the destination site and cannot accept any responsibility for its contents, links, or offers. Review the site’s security and confidentiality statements before using the site. So Stephanie’s self-employment tax total is $90,000 x 92.35% x 15.3%, which works out to $12,716.59.

While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. You won’t owe an estimated tax penalty if the tax shown on your 2024 return, minus your 2024 withholding, is less than $1,000. » Submitting an estimated tax payment with your tax extension request?

What are estimated taxes?

If you expect to owe more than $1,000 in additional taxes after calculating your withholding and refundable credits for the year, the IRS says you must pay estimated taxes. According to the IRS, you don’t have to make estimated tax payments if you’re a U.S. citizen or resident alien who owed no taxes for the previous full tax year. And you probably don’t have to pay estimated taxes unless you have untaxed income. If you have an overpayment on one year’s tax return, you can use it to get a head start on estimated tax payments for the following year. It’s as simple as applying all or a portion of your overpayment to the first quarter of your next year’s tax liability instead of receiving it as a refund. Paying 100% of the taxes you owed on last year’s federal tax return is sometimes referred to as the safe harbor rule.

Nonresident aliens use Form 1040-ES(NR) to figure estimated tax. The IRS encourages all taxpayers to check their withholdings with the IRS Tax Withholding estimated tax Estimator. Finally, be sure to check your eligibility for a pay-over-time installment plan, as issuers sometimes provide introductory offers.

Top Frequently Asked Questions for Estimated Tax

If you think you are going to make less, calculate about how much and try to pay 90%. If you pay 90%, and still owe a little more at the end of the year, that’s OK. TurboTax Premium searches 500 tax deductions to get you every dollar you deserve. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first.

• This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act.
• You’ll need to confirm your identity before making a payment using pay now options.
• This payment option comes standard with most software and allows you to submit a payment directly from your bank account when filing your return.
• Unless the 15th falls on a weekend or federal holiday, in which case the due date becomes the first business day following the 15th.
• Despite those surcharges, there are plenty of reasons why paying your taxes with a credit card can make sense.

The IRS generally discourages taxpayers from sending payments via the mail, but if you decide to pay your bill by check, money order or cashier’s check, have one made out to the U.S. Make sure it includes your name, address, daytime phone number, Social Security number or employer identification number, the tax year it should be applied to, and the related tax form or notice number. If you use IRS Free File or another tax-prep software to file your federal taxes, this e-pay feature is usually offered directly through the e-filing program. To make a payment, you’ll enter your banking information to authorize a direct debit withdrawal. You can also ask a human tax preparer to submit your payment through EFW if the preparer e-files on your behalf.

Pay by Debit Card, Credit Card or Digital Wallet

Generally speaking, anyone who owes more than $1,000 in a given tax year, after subtracting withholding and refundable credits, is required to pay quarterly estimated taxes. Traditionally this applied to high income taxpayers because of revenues from sources such as interest, dividends or rent. Form 1040-ES helps you figure your estimated taxes and provides vouchers to send along with your estimated tax amounts if you opt to pay by check or money order. Tax preparation software or your accountant can do the calculations for you. To determine how much you owe, check the income claimed and deductions taken on the previous year’s federal tax return to see if it will be comparable in the current year. If you find that you are required to make estimated tax payments, it is very important that you do so.