9.3 Estimated Tax: Individuals
Who Must Pay Estimated Tax
If you owed additional tax for 2006, you may have to pay estimated tax for 2007.
General Rule
You Must Pay estimated tax for 2007 if both of the following apply.
- You expect to owe at least $1,000 in tax for 2007, after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of:
-------a. 90% of the tax to be shown on your 2007 tax return, or
-------b. 100% of the tax shown on your 2006 tax return. *Your 2006 tax return must cover all 12 months.
--------* Certain taxpayers with higher adjusted gross income must substitute 110% for 100%. Refer to Chapter 2 of Publication 505, Tax Withholding and Estimated Tax, for the income amounts that the higher percentage applies to.
References:
- Publication 505, Tax Withholding and Estimated Tax
- Form 1040-ES (PDF), Estimated Tax for Individuals
If you are required to make estimated tax payments, self-employment tax is paid by making quarterly estimated tax payments which include both income tax and social security tax.
References:
- Publication 334, Tax Guide for Small Business
- Publication 505, Tax Withholding and Estimated Tax
Your first estimated tax payment is usually due the 15th of April. You may pay the entire year's estimated tax at that time, or you may pay your estimated tax in four payments. The four payments are due April 15th, June 15th, September 15, and January 15th of the following year.
If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday.
References:
- Publication 505, Tax Withholding and Estimated Tax, Chapter 2.
Take credit for all your estimated tax payments in the "Payments" section of Form 1040 (PDF), U.S. Individual Income Tax Return, or Form 1040A (PDF), U.S. Individual Income Tax Return.
References:
- Publication 505, Tax Withholding and Estimated Tax