QUESTION DETAIL
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Votes
How do I know if I have to make quarterly individual estimated tax payments?
ANSWER
Expert Todd Alexander's Answer:
Certainly if you are self-employed, you are going to need to make estimated tax payments. If you owe for the prior year, you may need to make estimated tax payments based upon changes in your income level. Read excerps of IRS Publication 505 and see how the rules apply to you. I have also inserted the website for a worksheet to determine your estimated payments.
IRS Publication 505 states the following:
If you owed additional tax for 2011, you may have to pay estimated tax for 2012.
You can use the following general rule as a guide during the year to see if you will have enough withholding, or should increase your withholding or make estimated tax payments.
The General Rule
In most cases, you must pay estimated tax for 2012 if both of the following apply.
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You expect to owe at least $1,000 in tax for 2012, after subtracting your withholding and refundable credits.
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You expect your withholding and refundable credits to be less than the smaller of:
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90% of the tax to be shown on your 2012 tax return, or
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100% of the tax shown on your 2011 tax return. Your 2011 tax return must cover all 12 months.
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http://www.irs.gov/publications/p505/15008e19.html
