There are two primary reasons to file quarterly tax estimates. The primary and most important one is to avoid an underpayment penalty. There are exceptions to the penalty, such as you owe less than $1,000, you paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less. The second reason is to avoid owing a large amount of tax when you file your tax return. If you owe a large amount of money at the time of filing and can not pay it, you will also incur penalties.
