Do I have to make "Estimated Tax" payments?

Revised for Tax Year 2011 (Calendar Year January 1, 2011 to December 31, 2011)

For personal income tax purposes, estimated tax payments can be used to pay Federal income tax, self-employment tax, and household employment tax. To estimate if you need to pay tax on income not subject to withholding or on other income from which not enough tax is withheld, you need to calculate if the total tax you'll owe on your annual income tax return will be covered by the amount of tax you have already had either:

• withheld from wages and other payments, or

• paid in earlier estimated payments for the year, or

• credited to your account from adjustments or overpayments of previously filed returns.

Generally, you should make estimated tax payments if you expect to owe tax at least $1,000 or more, after withholding and credits, and the total amount of tax withheld and your credits will be less than the SMALLER of:

• 90% of the tax to be shown on your 2011 income tax return, OR

• 100% of the tax shown on your 2010 income tax return, if your 2010 tax return covered all 12 months of the year. However, if your year 2010 adjusted gross income exceeded $150,000 ($75,000 if you file a separate return from your spouse), then you must pay 110% instead of 100% of last year's tax.

NOTE: Estimated tax payment requirements are different for farmers, fishermen, and certain household employers.

Estimated Tax Payment Due Dates

Your first estimated tax payment is due on April 18, 2011. You may pay the entire year's estimated tax at that time, or you may pay your estimated tax in four payments. The four payment due dates for calendar year 2011 are:

• April 18, 2011

• June 15, 2011

• September 15, 2011

• January 17, 2012

Normally, payments are due on the 15th day of the month. However, if the due date for making a tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next business day. You do not have to make the payment due on January 17, 2012 if you file your 2011 tax return by January 31, 2012 and pay the entire balance due with your return.

What is the minimum amount of estimated tax that I am required to pay without incurring any penalty or interest charges?

In general, you may owe a penalty for tax year 2011 if the total of your withholding and estimated tax payments does NOT equal at least the SMALLER of:

• 90% of your 2011 tax (current year tax), or

• 100% of your 2010 tax (prior year tax). (Your 2010 tax return must cover a 12-month period.) Your 2010 tax, for this purpose, is your total tax for 2010. There are special rules for farmers, fishermen, certain household employers, and certain higher income taxpayers.

Generally, you do NOT have to pay an underpayment penalty if either of the following conditions apply:

• Your total tax is less than $1,000 (less withholding and credits), OR

• You had NO tax liability in tax year 2010.

Can I make an "estimated tax" payment by credit/debit card?

Yes, click here for detailed information.

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