Tax Questions Blog
Who must pay estimated tax?
Not everyone must pay estimated tax. The following people must pay estimated tax.
If you had a tax liability for the tax year you may have to pay estimated tax the following calendar year. For example, if you owe taxes in 2007, then you may need to pay the IRS estimated tax in 2008.
You must pay estimated tax if both of the rules below apply to you.
- You expect to owe at least $1,000 in tax for the current tax year, after subtracting tax withholding and tax credits.
- You expect to your withholding and tax credits to be less than the smaller of:
- 90% of the tax to be shown in your current tax return
- 100% of the tax shown on your previous year’s tax return.
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