Estimated Tax requirement

Hi @rickanddianafreeman !

 

Here is a helpful resource for figuring your estimated tax requirement:

 

https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-pay-and-when/L3OPIbJNw

 

Hope this helps!

Cindy

Hi rickanddianafreeman!

 

I don't see a question but here are the estimated tax requirements:

Who Must Pay Estimated Tax

Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.

You may have to pay estimated tax for the current year if your tax was more than zero in the prior year. See the worksheet in Form 1040-ES, Estimated Tax for Individuals for more details on who must pay estimated tax.

 

@rickanddianafreeman,

The IRS uses a couple of rules to determine if you need to make quarterly estimated tax payments:

• You expect to owe more than $1,000 after subtracting withholding and tax credits when filing your return, or
• You expect your withholding and tax credits to be less than:
  • 90% of your estimated tax liability for the current tax year
  • 100% of the previous year's tax liability, assuming it covers all 12 months of the calendar year

These are commonly referred to as safe harbor rules. The 100% requirement increases to 110% if your adjusted gross income exceeds $150,000 ($75,000, if you're married and file separately).

Here is the resource that explains the requirements in more detail: https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-guide-to-paying-quarterly-taxes/L6p8C53xQ