Free Tax Course

Estimated Tax Requirements

If you don't meet the estimated tax payment requirements then you don't need to pay estimated tax.

Who don't need to pay estimated tax payments?

If all your 2008 income will be subject to income tax withholding and the withholding amount is correct, you will not need to make estimated tax payments.

Even if your income is not subject to income tax withholding, you do not have to make estimated tax payments in the current tax year if you meet all of the following conditions:

  1. You had no tax liability for the prior tax year.
  2. You were a US citizen or resident for the whole year.
  3. Your prior tax year covered a 12 month period.


You had no tax liability for a tax year if your total tax was zero or if you were not required to file an income tax return.

For example, if your 2006 tax return shows that you did not owe the IRS any tax payments, then you did not have to make estimated tax payments throughout the year 2007. However, when you file your 2007 tax return, if it shows that you owe the IRS anything, then you must make estimated tax payments during the year 2008. That could include the first estimated tax payment due at the same time of your 2007 tax return.

How much estimated tax payments you need to make quarterly depends on your estimated income and your estimated tax liability.


Estimated tax payments for married couples, filing jointly or separately

If you are married, apply the above rules to your separate estimated income to see if you must make estimated tax payments. If you can make joint estimated tax payments, you can apply the rules on a joint basis. You cannot make joint estimated tax payments if you are legally separated under a decree of divorce or separate maintenance or if either of you is a nonresident alien and have not elected to be treated as a resident alien or if you have different tax years. Your choice to make either separate or joint estimated tax payments will not affect your right to file either a joint tax return or separate tax return.



Looking for more IRS Deductions?