Form 1040 ES
The Estimated Tax Form

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When do you have to file form 1040 ES?

If you owe the IRS more than $1000- at the end of the year you might incur a penalty which you can avoid by making timely estimated payments using the 1040 ES form.

How much does the estimated tax payments have to be?

Form 1040 ES contains instructions and a special worksheet that helps you calculate the correct amount that you have to pay.

On this worksheet you have to figure out how much tax you expect to owe next year. Your payroll tax withholding and estimated payments must be at least 90% of this amount.

How much tax you will owe is not always possible to predict. So you can use a more sure method by looking at your past year's tax return.

Subtract the tax credits that you expect to get this year from all the taxes you paid last year. You do not have to pay more taxes than the past year. If you use last year's tax as a base you must pay 100% of the tax during the year, either by payroll tax withholding or estimated payments.

    The IRS considers tax credits a form of paying taxes. So when you pay taxes you have to add tax credits plus payroll tax withholding plus estimated income tax payments to see how much you paid.

There are special rules for various groups that makes calculating estimated tax different.

Farmers and Fishermen who two-thirds of their income is from farming or fishing, only have to pay two-thirds of the expected tax to avoid penalties.

Household Employers usually have to include household employment taxes in their estimated tax.

Higher Income Taxpayers will have to pay 110% of their previous year's tax.

How and when is the estimated tax paid?

The 1040 ES form package includes four vouchers that have to be used to pay the estimated federal income tax. Each voucher is labeled with the correct due date which is usually the 15th day of April, June, September, and January of the next year.

The last payment can be paid with the tax return if you file before January 31. You can also apply part of your tax return refund to your estimated tax of the coming year.

Is there a way to avoid filing the form 1040 ES?

If you have taxes withheld from your payroll but expect to have other income from which taxes are not deducted from, you can ask your employer to withhold more taxes from your wages instead of paying estimated tax. You would need to file a new W4 form with your employer.

If you receive unemployment compensation or pension you can also ask that taxes be withheld from it.

More help on estimated income tax payments

Publication 505

Estimated tax forms

Updated December 30, 2012

Go to Estimated Federal Income Tax

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