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Estimated Tax Amount

 

You should pay enough estimated tax by the due date of each estimated tax payment period to avoid a penalty for underpayment of estimated tax for that period. You can figure the amount of estimated tax for each period by using:

  1. the regular installment method or
  2. the annualized income installment method.

How to find the estimated tax amount?

Regular income earners

To find the amount due each estimated tax payment period using the regular installment method, divide the required annual payment you expect to owe for the year by 4. Use this method only if your first estimated tax payment is due by April 15 and you expect your annual estimated income to stay the same throughout the year.

Estimated Tax Amount

 

Irregular income earners

If you do not receive your income evenly throughout the year (for example, your income from the swimming pool store you own is much larger in the summer), your required estimated payment for any one estimated tax payment period may be less than the amount figured using the regular installment method. To see if you can pay less for any period use the worksheet and follow the instructions on IRS Publication 505, Tax Withholding and Estimated Tax. Use the Annualized income installment method to calculate your estimated tax for the period.


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