Income tax is a pay-as-you-go system. If you're an employee, you pay as you go through withholding. However, you might be self-employed. If you are, you must make quarterly estimated tax payments for the amount you expect to owe the IRS. These payments should satisfy both your income and self-employment taxes.
If you have other income, you might be able to withhold enough to cover self-employment taxes. Other income could include W-2 wages. So, you might not need to make estimated payments. However, in some cases, you might need to make estimated payments. Ex: You receive a substantial amount of taxable income not subject to withholding.
You might make estimated payments for income that’s not tax-free and comes from:
Personal residence sale
Estimated tax payments for 2013 are due:
April 15, 2013
June 15, 2013
Sept. 15, 2013
Jan. 15, 2014
You can make estimated tax payments using any of these methods:
Apply your 2012 refund to your 2013 estimated tax.
Mail a check or money order with Form 1040-ES: Estimated Tax for Individuals.
Use the Electronic Federal Tax Payment System (EFTPS) to submit payments electronically. Visit www.eftps.gov or call 800-555-4477. You can make payments weekly, monthly, or quarterly. You can schedule payments up to 365 days in advance.
To learn more about credit-card options, see www.irs.gov. You might be charged a convenience fee for using your credit card.
To learn more, see Form 1040-ES instructions at www.irs.gov.
You must make estimated tax payments and file Form 1040-ES if both of these apply:
Your estimated tax due is $1,000 or more.
The total amount of your tax withholding and refundable credits is less than the smaller of:
90% of your 2013 tax liability
100% of your 2012 tax liability
Special rules exist for higher-income taxpayers. Your 2012 adjusted gross income (AGI) might be more than:
$150,000 if married filing jointly
If it is, you must prepay 110% instead of 100% of the 2012 tax. You’ll need to do this to avoid a possible underpayment penalty for 2013.
To learn more about the estimated tax penalty, see the Underpayment of Estimated Tax tax tip.