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Who Must Pay Estimated Tax

Who must make estimated tax payments for next year?

You need to determine at the beginning of the tax year whether you must make estimated tax payments. You do this by estimating the income you will receive during the tax year and the estimated tax on that income.

What is the required estimated tax payment?

The required estimated tax payment depends on the amount of tax you think you will be liable for and how much tax you will pay through withholding.

What is my actual income is different from what I estimated?

If your actual income is different from what you estimated, you must recalculate the amount of your remaining payments during the year.

Do I have to pay estimated tax?

In general, you must make estimated payments during the tax year if you expect to owe at least $1,000 in tax for 2008 after subtracting your tax withholding and tax credits AND you expect your withholding and tax credits to be less than the smaller of:

  • 90% of the tax to be shown on your 2008 tax return
  • 100% of the tax shown on your 2007 tax return which must cover all 12 months of the year. There are different rates for farmers, fishermen, higher income taxpayers, or when you are filing married filing separately tax return.

Who Must Pay Estimated Tax


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