How Do I Pay Estimated Taxes? When Must I Make Estimated Tax Payments?

Question: How Do I Pay Estimated Taxes? When Must I Make Estimated Tax Payments?

Answer:

What Are the Requirements for Paying Estimated Taxes?
You will need to pay estimated taxes depending on how much you owe and your business legal type.

Non-Corporation
If you are a sole proprietor, partner, or s-corporation shareholder, you will need to pay estimated taxes if both of the following apply:

• You expect to owe at least $1,000 in tax for this calendar year after subtracting your withholding and credits.
  
• You expect your withholding and credits to be less than the smaller of:
  
  • 90% of the tax to be shown on your tax return, or
    
  • 100% of the tax shown on last year's income tax return. Your tax return for last year must cover all 12 months.

Corporation
If you are filing a tax return for a corporation, you generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return.

When to Pay
Due dates for estimated taxes are based on when income was received:

• For income received for the period January 1 through March 31, the due date is April 15.
  
• For income received for the period April 1 through May 31, the due date is June 15.
  
• For income received for the period June 1 through August 31, the due date is September 15.
  
• For income received for the period September 1 through December 31, the due date is January 15 of the next year.

How Much to Pay
The IRS general rule is that you must pay the smaller of:

• 90% of your total expected tax for this year, or
  
• 100% of the total tax shown on your last year's return. Your last year tax return must cover all 12 months.

How to estimate

• If you are a sole proprietor, partner, or s corporation shareholder, you can estimate your taxes using the estimated tax worksheet in Publication 505:Estimated Tax .
  
• If you are a corporation, use form 1120-W to estimate the taxes you owe.

How to pay business taxes
You can pay your estimated taxes in any of the usual ways:

• By check
  
• Through the Electronic Federal Tax Payment System (EFTPS)
  
• Electronic Funds Withdrawal, or
  
• Credit Card.

>More about Estimated Taxes.