You should pay in quarterly estimated taxes (or increase your withholding) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your current year’s tax return, or 100% of the tax shown on your prior year’s tax return. (110% for higher income people; $150K)
If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”
Q. Want to confirm we are not subject to estimated taxes because we are paying via my deductions.
A. Yes.
Q. What is the best way to just make an early tax payment to the IRS? Using1040 ES makes it look like I've missed the April 15th deadline?
A. Increased withholding or make quarterly payments are the only two options (or some of each). You did miss the April 15 deadline. But quarterly deadlines only apply to 1040-ES estimates, not to increasing your withholding at your job. Withholding is treated as spread out over the whole year. In an extreme example; you could have one big withholding taken out of your December pay and meet the rule (but doing that might annoy your employer).
If you go the quarterly estimates route, the estimated payments do not have to be equal if her 1099 income is irregular. For example if she had little or no income in the first quarter, an April 15 payment was not required. Again, in an extreme example, if all her income came in the 4th quarter, then only the fourth quarter payment is required. If you do use irregular quarterly payments, filing form 2210 will, most likely, be required.
