Estimated Tax (Form 1040ES)

Estimated tax is how you pay taxes on income that does not have enough (or any) tax withheld during the year. This often applies to people who are self‑employed or have income outside of a regular paycheck.

Common types of income that may require estimated tax payments include:

• Self‑employment income
• Interest and dividends
• Rental income
• Alimony (for divorces finalized before 2019)
• Capital gains
• Prizes and awards

Estimated tax is also required if the tax withheld from your wages or other income is not enough to cover your total tax bill.

🧾 Form Used: IRS Form 1040‑ES

To figure and pay estimated taxes, individuals use:

Form 1040‑ES – Estimated Tax for Individuals

It includes:

• A worksheet to estimate how much tax you’ll owe
• Payment vouchers if you mail payments
• Instructions for online and electronic payments

You do not file Form 1040‑ES with your tax return. It is used only to calculate and submit payments during the year.

📅 Payment Schedule

Estimated taxes are usually paid in four payments per year:

If a due date falls on a weekend or holiday, the deadline moves to the next business day.

🧮 Who Needs to Pay Estimated Tax?

You generally need to make estimated tax payments if both of the following apply:

• You expect to owe $1,000 or more in tax after withholding and refundable credits, and
• Your withholding and credits will be less than the smaller of:
  • 90% of your total tax for the current year, or
  • 100% of your total tax from last year
    • (110% if your AGI was over $150,000)

🧾 Reporting in Program

The program provides three separate areas related to estimated taxes, depending on what you need to do. Enter payments you already made to reduce your tax bill. Use the calculator and vouchers only to plan or pay future estimated taxes.