It's important to keep in mind the Estimated Tax payment schedule if you believe you will owe more than $1,000 or more on a tax return. There are underpayment and late payment penalties and interest when you owe currently around .5% a month up to a 25% cap plus 8% interest on the unpaid balance. Here is the schedule:
| Payment Period |
Due Date |
| January 1 – March 31 |
April 15 |
| April 1 – May 31 |
June 15 |
| June 1 – August 31 |
September 15 |
| September 1 – December 31 |
January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax |
It's more important to consider estimated tax payments when you are self employed via an LLC or other flow through entity as no withholdings are generally made as would be the case with an employer on a W2. The tax rate for self-employed earnings is 15.3% PLUS regular income tax using the following tax bracket below. If you have employees and pay wages via a payroll company, Quickbooks or some other method, you may pay yourself wages too, in which case, you could withhold taxes for yourself and any employees.
If you believe you will owe $1,000 or more for the current year, not only do you have to pay at least 100% of the prior year tax withheld or 90% of the current anticipated tax due for the current year to avoid underpayment penalties, you have to pay timely quarterly to avoid late payment penalties and interest noted above.
Cheers!
