An estimated tax based on the prior year tax return is the Total Tax (line 24 on the 1040) amount on the previous tax return divided by 4 payments. This will help you avoid underpayment penalties the following year. However, for Married Filing Joint couples with an AGI greater than $150,000 or Single with an AGI greater than $75,000 you must pay the lower of
- 90% of the tax shown on the current year’s return or
- 110% of the tax shown on the return for the previous year.
