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The US Estimated Tax Form, officially known as Form 1040-ES, plays a critical role in the tax system for individuals earning income not subject to withholding taxes. This includes earnings from self-employment, interest, dividends, rents, and alimony, among other sources. For individuals who do not opt for voluntary withholding on these types of income, estimated tax payments become necessary to avoid potential penalties. The form is designed to assist taxpayers in calculating and remitting these payments on a quarterly basis. Special considerations apply to certain groups, such as farmers, fishermen, and higher income taxpayers, indicating a need for these individuals to pay close attention to the unique rules that may affect their estimated taxes. Notably, the form outlines exceptions where estimated tax payments are not required, specifically for those who had no tax liability in the previous year and meet certain conditions. For the 2022 tax year, updates include adjustments to the standard deduction amounts, affecting how individuals calculate their taxable income. Furthermore, the form underscores the importance of considering changes in income, deductions, and eligible credits when figuring estimated taxes. The necessity for making estimated tax payments applies not only to US citizens and residents but also extends to those in US territories and nonresident aliens, underlining the broad applicability of these tax obligations. Additionally, the document provides guidance on how taxpayers can amend their estimated tax payments and outlines the various payment methods available, ensuring individuals can navigate the process of meeting their tax obligations effectively.

Us Estimated Tax Example

2022

Form 1040-ES

Department of the Treasury

Internal Revenue Service

Estimated Tax for Individuals

Purpose of This Package

Note. These percentages may be different if you are a

Use Form 1040-ES to figure and pay your estimated tax

farmer, fisherman, or higher income taxpayer. See

Special Rules, later.

for 2022.

Exception. You don’t have to pay estimated tax for 2022

 

Estimated tax is the method used to pay tax on income

 

if you were a U.S. citizen or resident alien for all of 2021

that isn’t subject to withholding (for example, earnings

and you had no tax liability for the full 12-month 2021 tax

from self-employment, interest, dividends, rents, alimony,

year. You had no tax liability for 2021 if your total tax was

etc.). In addition, if you don’t elect voluntary withholding,

zero or you didn’t have to file an income tax return.

you should make estimated tax payments on other

Special Rules

taxable income, such as unemployment compensation

and the taxable part of your social security benefits.

There are special rules for farmers, fishermen, certain

Change of address. If your address has changed, file

household employers, and certain higher income

Form 8822, to update your record.

taxpayers.

Future developments. For the latest information about

Farmers and fishermen. If at least two-thirds of your

developments related to Form 1040-ES and its

gross income for 2021 or 2022 is from farming or fishing,

instructions, such as legislation enacted after they were

substitute 662/3% for 90% in (2a) under General Rule.

published, go to

IRS.gov/Form1040ES

.

 

Household employers. When estimating the tax on your

 

 

Who Must Make Estimated Tax

taxes if either of the following applies.

Payments

2022 tax return, include your household employment

• You will have federal income tax withheld from wages,

The estimated tax rules apply to:

pensions, annuities, gambling winnings, or other income.

•

U.S. citizens and resident aliens;

• You would be required to make estimated tax payments

•

Residents of Puerto Rico, the U.S. Virgin Islands,

to avoid a penalty even if you didn’t include household

Guam, the Commonwealth of the Northern Mariana

employment taxes when figuring your estimated tax.

Islands, and American Samoa; and

Higher income taxpayers. If your adjusted gross

•

Nonresident aliens (use Form 1040-ES (NR)).

income (AGI) for 2021 was more than $150,000 ($75,000

 

!

If you filed a Schedule H or Schedule SE with your

if your filing status for 2022 is married filing separately),

 

Form 1040 or 1040-SR for 2020, and deferred

substitute 110% for 100% in (2b) under General Rule,

CAUTION some of the household employment and/or

earlier. This rule doesn’t apply to farmers or fishermen.

self-employment tax payments you owe for 2020, don't

Increase Your Withholding

use Form 1040-ES to make this payment. Instead, make

this payment separate from other payments and apply the

If you also receive salaries and wages, you may be able to

payment to the 2020 tax year where the payment was

avoid having to make estimated tax payments on your

deferred. You can use Direct Pay, available only on

other income by asking your employer to take more tax

IRS.gov, to make the payment. Select the "balance due"

out of your earnings. To do this, file a new Form W-4,

reason for payment or, if paying with a debit or credit card,

Employee's Withholding Certificate, with your employer.

select “installment agreement.” Go to IRS.gov/Payments

Generally, if you receive a pension or annuity you can

to see all your payment options.

 

 

use Form W-4P, Withholding Certificate for Periodic

General Rule

Pension or Annuity Payments, to start or change your

withholding from these payments.

In most cases, you must pay estimated tax for 2022 if both

You can also choose to have federal income tax

of the following apply.

withheld from certain government payments (see Form

 

1. You expect to owe at least $1,000 in tax for 2022,

 

W-4V, Voluntary Withholding Request) or from

after subtracting your withholding and refundable credits.

nonperiodic payments and eligible rollover distributions

 

2. You expect your withholding and refundable credits

(see Form W-4R, Withholding Certificate for Nonperiodic

to be less than the smaller of:

Payments and Eligible Rollover Distributions).

or

a.

90% of the tax to be shown on your 2022 tax return,

 

You can use the Tax Withholding Estimator at

b. 100% of the tax shown on your 2021 tax return.

TIP

IRS.gov/W4App to determine whether you need

 

 

 

 

 

 

to have your withholding increased or decreased.

Your 2021 tax return must cover all 12 months.

 

 

 

Jan 24, 2022

Cat. No. 11340T

Additional Information You May Need

You can find most of the information you will need in Pub. 505, Tax Withholding and Estimated Tax, and in the instructions for the 2021 Form 1040 and 1040-SR.

For details on how to get forms and publications, see the 2021 Instructions for Form 1040.

What's New

In figuring your 2022 estimated tax, be sure to consider the following.

Standard deduction amount increased. For 2022, the standard deduction amount has been increased for all filers. If you don't itemize your deductions, you can take the 2022 standard deduction listed in the following chart for your filing status.

IF your 2022 filing status is...

THEN your standard

deduction is...

 

Married filing jointly or

$25,900

Qualifying widow(er)

 

Head of household

$19,400

Single or Married filing separately

$12,950

 

 

 

However, if you can be claimed as a dependent on

another person's 2022 return, your standard deduction is

the greater of:

 

•

$1,150, or

 

•

Your earned income plus $400 (up to the standard

deduction amount).

 

 

Your standard deduction is increased by the following

amount if, at the end of 2022, you are:

 

•

An unmarried individual (single or head of household)

and are:

 

65 or older or blind

$1,750

65 or older and blind

$3,500

•A married individual (filing jointly or separately) or a qualifying widow(er) and are:

65 or older or blind

$1,400

65 or older and blind

$2,800

Both spouses 65 or older

$2,800*

Both spouses 65 or older and blind

$5,600*

*Only if married filing jointly. If married filing separately, these

 

amounts do not apply.

 

!

Your standard deduction is zero if (a) your spouse

itemizes on a separate return, or (b) you were a

CAUTION

dual-status alien and you do not elect to be taxed

as a resident alien for 2022.

 

Social security tax. For 2022, the maximum amount of earned income (wages and net earnings from self-employment) subject to the social security tax is $147,000.

Adoption credit or exclusion. For 2022, the maximum adoption credit or exclusion for employer-provided

adoption benefits has increased to $14,890. In order to claim either the credit or exclusion, your modified adjusted gross income must be less than $263,410.

Reminders

Individual taxpayer identification number (ITIN) re- newal. If you were assigned an ITIN before January 1, 2013, or if you have an ITIN that you haven’t included on a tax return in the last 3 consecutive years, you may need to renew it. For more information, see the Instructions for Form W-7.

Advance payments of the premium tax credit. If you buy health care insurance through the Health Insurance Marketplace, you may be eligible for advance payments of the premium tax credit to help pay for your insurance coverage. Receiving too little or too much in advance will affect your refund or balance due. Promptly report changes in your income or family size to your Marketplace. See Form 8962 and its instructions for more information.

Access Your Online Account (Individual Taxpayers Only)

Go to IRS.gov/Account to securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax year.

• See payment plan details or apply for a new payment plan.

• Make a payment, view 5 years of payment history and any pending or scheduled payments.

• Access your tax records, including key data from your most recent tax return, your economic impact payment amounts, and transcripts.

• View digital copies of select notices from the IRS.

• Approve or reject authorization requests from tax professionals.

• Update your address or manage your communication preferences.

How To Figure Your Estimated Tax

You will need:

• The 2022 Estimated Tax Worksheet,

• The Instructions for the 2022 Estimated Tax Worksheet,

• The 2022 Tax Rate Schedules, and

• Your 2021 tax return and instructions to use as a guide to figuring your income, deductions, and credits (but be sure to consider the items listed under What's New, earlier).

Matching estimated tax payments to income. If you receive your income unevenly throughout the year (for example, because you operate your business on a seasonal basis or you have a large capital gain late in the year), you may be able to lower or eliminate the amount of your required estimated tax payment for one or more periods by using the annualized income installment method. See chapter 2 of Pub. 505 for details.

Changing your estimated tax. To amend or correct your estimated tax, see How To Amend Estimated Tax Payments, later.

-2-

Form 1040-ES (2022)

You can’t make joint estimated tax payments if ! you or your spouse is a nonresident alien, you are

CAUTION separated under a decree of divorce or separate maintenance, or you and your spouse have different tax years.

Additionally, individuals who are in registered domestic partnerships, civil unions, or other similar formal relationships that aren’t marriages under state law cannot make joint estimated tax payments. These individuals can take credit only for the estimated tax payments that they made.

Payment Due Dates

You can pay all of your estimated tax by April 18, 2022, or in four equal amounts by the dates shown below.

1st payment

April 18, 2022

2nd payment

June 15, 2022

3rd payment

Sept. 15, 2022

4th payment

Jan. 17, 2023*

*You don’t have to make the payment due January 17, 2023, if you file your 2022 tax return by January 31, 2023, and pay the entire balance due with your return.

If you mail your payment and it is postmarked by the due date, the date of the U.S. postmark is considered the date of payment. If your payments are late or you didn’t pay enough, you may be charged a penalty for underpaying your tax. See When a Penalty Is Applied, later.

You can make more than four estimated tax TIP payments. To do so, make a copy of one of your

unused estimated tax payment vouchers, fill it in, and mail it with your payment. If you make more than four payments, to avoid a penalty, make sure the total of the amounts you pay during a payment period is at least as much as the amount required to be paid by the due date for that period. For other payment methods, see How To Pay Estimated Tax, later.

No income subject to estimated tax during first pay- ment period. If, after March 31, 2022, you have a large change in income, deductions, additional taxes, or credits that requires you to start making estimated tax payments, you should figure the amount of your estimated tax payments by using the annualized income installment method, explained in chapter 2 of Pub. 505. If you use the annualized income installment method, file Form 2210, including Schedule AI, with your 2022 tax return even if no penalty is owed.

Farmers and fishermen. If at least two-thirds of your gross income for 2021 or 2022 is from farming or fishing, you can do one of the following.

• Pay all of your estimated tax by January 17, 2023.

• File your 2022 Form 1040 or 1040-SR by March 1, 2023, and pay the total tax due. In this case, 2022 estimated tax payments aren’t required to avoid a penalty. Fiscal year taxpayers. You are on a fiscal year if your

12-month tax period ends on any day except December 31. Due dates for fiscal year taxpayers are the 15th day of the 4th, 6th, and 9th months of your current fiscal year and

the 1st month of the following fiscal year. If any payment date falls on a Saturday, Sunday, or legal holiday, use the next business day. See Pub. 509, Tax Calendars, for a list of all legal holidays.

Name Change

If you changed your name because of marriage, divorce, etc., and you made estimated tax payments using your former name, attach a statement to the front of your 2022 paper tax return. On the statement, show all of the estimated tax payments you (and your spouse, if filing jointly) made for 2022 and the name(s) and SSN(s) under which you made the payments.

Be sure to report the change to your local Social Security Administration office before filing your 2022 tax return. This prevents delays in processing your return and issuing refunds. It also safeguards your future social security benefits. For more details, call the Social Security Administration at 800-772-1213 (TTY/TDD 800-325-0778).

How To Amend Estimated Tax Payments

To change or amend your estimated tax payments, refigure your total estimated tax payments due (see the 2022 Estimated Tax Worksheet). Then, to figure the payment due for each remaining payment period, see Amended estimated tax in chapter 2 of Pub. 505. If an estimated tax payment for a previous period is less than one-fourth of your amended estimated tax, you may owe a penalty when you file your return.

When a Penalty Is Applied

In some cases, you may owe a penalty when you file your return. The penalty is imposed on each underpayment for the number of days it remains unpaid. A penalty may be applied if you didn’t pay enough estimated tax for the year or you didn’t make the payments on time or in the required amount. A penalty may apply even if you have an overpayment on your tax return.

The penalty may be waived under certain conditions. See the Instructions for Form 2210 for details.

How To Pay Estimated Tax

Pay Online

Paying online is convenient and secure and helps make sure we get your payments on time. To pay your taxes online or for more information, go to IRS.gov/Payments.

Once you are issued a social security number (SSN), use it when paying your estimated taxes online. Use your SSN even if your SSN does not authorize employment or if you have been issued an SSN that authorizes employment and you lose your employment authorization. An ITIN will not be issued to you once you have been issued an SSN. If you received your SSN after previously using an ITIN, stop using your ITIN. Use your SSN instead.

You can pay using any of the following methods.

• Your Online Account. You can now make tax payments through your online account, including balance

Form 1040-ES (2022)

-3-

payments, estimated tax payments, or other types. You can also see your payment history and other tax records there. Go to IRS.gov/Account.

• IRS Direct Pay. For online transfers directly from your checking or savings account at no cost to you, go to IRS.gov/Payments.

• Pay by Card. To pay by debit or credit card, go to IRS.gov/Payments. A convenience fee is charged by these service providers.

• Electronic Fund Withdrawal (EFW) is an integrated e-file/e-pay option offered when filing your federal taxes electronically using tax preparation software, through a tax professional, or the IRS at IRS.gov/Payments.

• Online Payment Agreement. If you can’t pay in full by the due date of your tax return, you can apply for an online monthly installment agreement at IRS.gov/Payments.

Once you complete the online process, you will receive immediate notification of whether your agreement has been approved. A user fee is charged.

Pay by Phone

Paying by phone is another safe and secure method of paying electronically. Use one of the following methods:

(1) call one of the debit or credit card service providers, or

(2) the Electronic Federal Tax Payment System (EFTPS). Debit or credit card. Call one of our service providers. Each charges a fee that varies by provider, card type, and payment amount.

Link2Gov Corporation

888-PAY-1040TM (888-729-1040) www.PAY1040.com

WorldPay US, Inc.

844-PAY-TAX-8TM (844-729-8298) www.payUSAtax.com

ACI Payments, Inc.

888-UPAY-TAXTM (888-872-9829) fed.acipayonline.com

EFTPS. To use EFTPS, you must be enrolled either online or have an enrollment form mailed to you. To make a payment using EFTPS, call 800-555-4477 (English) or 800-244-4829 (Español). People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 800-733-4829. For more information about EFTPS, go to IRS.gov/Payments or www.EFTPS.gov.

Mobile Device

To pay through your mobile device, download the IRS2Go app.

Pay by Cash

Cash is an in-person payment option for individuals provided through retail partners with a maximum of $1,000 per day per transaction. To make a cash payment, you must first be registered online at fed.acipayonline.com, our official payment provider. Don't send cash payments through the mail.

Pay by Check or Money Order Using the Estimated Tax Payment Voucher

Before submitting a payment through the mail using the estimated tax payment voucher, please consider alternative methods. One of our safe, quick, and easy online payment options might be right for you.

If you choose to mail in your payment, there is a separate estimated tax payment voucher for each due date. The due date is shown in the upper right corner. Complete and send in the voucher only if you are making a payment by check or money order. If you and your spouse plan to file separate returns, file separate vouchers instead of a joint voucher.

To complete the voucher, do the following.

• Print or type your name, address, and SSN in the space provided on the estimated tax payment voucher. Enter your SSN even if your SSN does not authorize employment or if you have been issued an SSN that authorizes employment and you lose your employment authorization. If you have an ITIN, enter it wherever your SSN is requested. An ITIN will not be issued to you once you have been issued an SSN. If you received your SSN after previously using an ITIN, stop using your ITIN. Use your SSN instead. If filing a joint voucher, also enter your spouse's name and SSN. List the names and SSNs in the same order on the joint voucher as you will list them on your joint return.

• Enter in the box provided on the estimated tax payment voucher only the amount you are sending in by check or money order. When making payments of estimated tax, be sure to take into account any 2021 overpayment that you choose to credit against your 2022 tax, but don’t include the overpayment amount in this box.

• Make your check or money order payable to “United States Treasury.” Don’t send cash. To help process your payment accurately, enter the amount on the right side of the check like this: $ XXX.XX. Don’t use dashes or lines (for example, don’t enter “$ XXX—” or “$ XXX xx/100”).

• Enter “2022 Form 1040-ES” and your SSN on your check or money order. If you are filing a joint estimated tax payment voucher, enter the SSN that you will show first on your joint return.

• Enclose, but don’t staple or attach, your payment with the estimated tax payment voucher.

Notice to taxpayers presenting checks. When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction. When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day we receive your payment, and you will not receive your check back from your financial institution.

No checks of $100 million or more accepted. The IRS can’t accept a single check (including a cashier’s check) for amounts of $100,000,000 ($100 million) or more. If you are sending $100 million or more by check, you will need to spread the payment over 2 or more checks with each check made out for an amount less than $100 million. This limit doesn’t apply to other methods of payment (such as electronic payments). Please consider

-4-

Form 1040-ES (2022)

a method of payment other than check if the amount of the payment is over $100 million.

Where To File Your Estimated Tax Payment Voucher if Paying by Check or Money Order

Mail your estimated tax payment voucher and check or money order to the address

A foreign country, American Samoa,

Internal Revenue Service

shown below for the place where you live. Do not mail your tax return to this address or

or Puerto Rico (or are excluding

P.O. Box 1303

send an estimated tax payment without a payment voucher. Also, do not mail your

income under Internal Revenue Code

Charlotte, NC 28201-1303

estimated tax payments to the address shown in the Form 1040 instructions. If you

933), or use an APO or FPO address,

 

need more payment vouchers, you can make a copy of one of your unused vouchers.

or file Form 2555 or 4563, or are a

 

 

 

dual-status alien or nonpermanent

 

 

 

resident of Guam or the U.S. Virgin

 

 

 

Islands

 

Caution: For proper delivery of your estimated tax payment to a P.O. box, you must

Guam:

Department of

include the box number in the address. Also, note that only the U.S. Postal Service can

Bona fide residents*

Revenue and Taxation

deliver to P.O. boxes. Therefore, you cannot use a private delivery service to make

 

Government of Guam

estimated tax payments required to be sent to a P.O. box.

 

 

P.O. Box 23607

 

 

 

GMF, GU 96921

IF you live in . . .

THEN send it to . . .

U.S. Virgin Islands:

Virgin Islands Bureau

 

 

Bona fide residents*

of Internal Revenue

 

 

 

6115 Estate Smith Bay

 

 

 

Suite 225

 

 

 

St. Thomas, VI 00802

Alabama, Arizona, Florida, Georgia,

Internal Revenue Service

 

 

Louisiana, Mississippi, New Mexico,

P.O. Box 1300

 

 

North Carolina, South Carolina,

Charlotte, NC 28201-1300

 

 

Tennessee, Texas

 

 

 

Arkansas, Connecticut, Delaware,

Internal Revenue Service

 

 

District of Columbia, Illinois, Indiana,

P.O. Box 931100

 

 

Iowa, Kentucky, Maine, Maryland,

Louisville, KY 40293-1100

 

 

Massachusetts, Minnesota, Missouri,

 

 

 

New Hampshire, New Jersey, New

 

 

 

York, Oklahoma, Rhode Island,

 

 

 

Vermont, Virginia, West Virginia,

 

 

 

Wisconsin

 

 

 

Alaska, California, Colorado, Hawaii,

Internal Revenue Service

 

 

Idaho, Kansas, Michigan, Montana,

P.O. Box 802502

 

 

Nebraska, Nevada, Ohio, Oregon,

Cincinnati, OH 45280-2502

 

 

North Dakota, Pennsylvania, South

 

 

 

Dakota, Utah, Washington, Wyoming

 

 

 

*Bona fide residents must prepare separate vouchers for estimated income tax and self-employment tax payments. Send the income tax vouchers to the address for bona fide residents and the self-employment tax vouchers to the address for non-bona fide residents.

Instructions for the 2022 Estimated Tax Worksheet

Line 1. Adjusted gross income. When figuring the adjusted gross income you expect in 2022, be sure to consider the items listed under What’s New, earlier. For more details on figuring your AGI, see Expected AGI—Line 1 in chapter 2 of Pub. 505.

If you are self-employed, be sure to take into account the deduction for self-employment tax. Use the 2022 Self-Employment Tax and Deduction Worksheet for Lines 1 and 9 of the Estimated Tax Worksheet to figure the amount to subtract when figuring your expected AGI. This worksheet will also give you the amount to enter on line 9 of your estimated tax worksheet.

Line 7. Credits. See the 2021 Form 1040 or 1040-SR, line 19, and Schedule 3 (Form 1040), lines 1 through 6z, and the related instructions for the types of credits allowed.

Line 9. Self-employment tax. If you and your spouse make joint estimated tax payments and both of you have self-employment income, figure the self-employment tax

for each of you separately. Enter the total on line 9. When estimating your 2022 net earnings from self-employment, be sure to use only 92.35% (0.9235) of your total net profit from self-employment.

Line 10. Other taxes. Use the 2021 Instructions for Form 1040 to determine if you expect to owe, for 2022, any of the taxes that would have been entered on your 2021 Schedule 2 (Form 1040), line 8 through 12 and 14 through 17z (see Exception 2, later). On line 10, enter the total of those taxes, subject to the following two exceptions.

Exception 1. Include household employment taxes from Schedule 2 (Form 1040), line 9, on this line only if:

• You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income; or

• You would be required to make estimated tax payments (to avoid a penalty) even if you didn’t include household employment taxes when figuring your estimated tax.

If you meet either of the above, include the total of your household employment taxes on line 10.

Form 1040-ES (2022)

-5-

2022 Self-Employment Tax and Deduction Worksheet for

Keep for Your Records

Lines 1 and 9 of the Estimated Tax Worksheet

1a. Enter your expected income and profits subject to self-employment tax*

1a.

b.If you will have farm income and also receive social security retirement or disability benefits, enter your expected Conservation Reserve Program payments that will be

 

included on Schedule F (Form 1040) or listed on Schedule K-1 (Form 1065)

b.

 

2.

. . . . . . . . . .Subtract line 1b from line 1a

2.

 

3.

. . . . . . . . . .Multiply line 2 by 92.35% (0.9235)

3.

 

4.

. . . . . . . . . . . . .Multiply line 3 by 2.9% (0.029)

. . . . . . . . . . . . . . . . .

5.

Social security tax maximum income

5.

$147,000

6.Enter your expected wages (if subject to social security tax or the 6.2% portion of

 

tier 1 railroad retirement tax)

6.

7.

Subtract line 6 from line 5

7.

 

Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.

 

8.

Enter the smaller of line 3 or line 7

8.

9.

Multiply line 8 by 12.4% (0.124)

. . . . . . . . . . . . . . . . . .

10.

Add lines 4 and 9. Enter the result here and on line 9 of your 2022 Estimated Tax Worksheet

. . . . . . . . . . . . . . . . .

11.

Multiply line 10 by 50% (0.50). This is your expected deduction for self-employment tax on

 

 

Schedule 1 (Form 1040), line 15. Subtract this amount when figuring your expected AGI on

11.

 

line 1 of your 2022 Estimated Tax Worksheet

4.

9.

10.

*Your net profit from self-employment is found on Schedule C (Form 1040), line 31; Schedule F (Form 1040), line 34; and Schedule K-1 (Form 1065), box 14, code A.

Exception 2. Because the following taxes are not required to be paid until the due date of your income tax (not including extensions), do not include them on line 10.

• Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance (Schedule 2, line 13),

• Recapture of federal mortgage subsidy (Schedule 2, line 17b),

• Excise tax on excess golden parachute payments (Schedule 2, line 17k),

• Excise tax on insider stock compensation from an expatriated corporation (Schedule 2, line 17m), and

• Look-back interest under section 167(g) or 460(b) (Schedule 2, line 17n).

Additional Medicare Tax. For information about the Additional Medicare Tax, see the Instructions for Form 8959.

Net Investment Income Tax (NIIT). For information about the Net Investment Income Tax, see the Instructions for Form 8960.

Repayment of first-time homebuyer credit. You must repay the first-time homebuyer credit if you bought the home in 2008.

For details about repaying the first-time homebuyer credit, see the Instructions for Form 5405.

Line 12b. Prior year's tax. Enter the 2021 tax you figure according to the instructions in Figuring your 2021 tax unless you meet one of the following exceptions.

• If the AGI shown on your 2021 return is more than $150,000 ($75,000 if married filing separately for 2022), enter 110% of your 2021 tax as figured next.

Note. This doesn’t apply to farmers or fishermen.

• If you will file a joint return for 2022 but you didn’t file a joint return for 2021, add the tax shown on your 2021

return to the tax shown on your spouse's 2021 return and enter the total on line 12b.

• If you filed a joint return for 2021 but you will not file a joint return for 2022, first figure the tax both you and your spouse would have paid had you filed separate returns for 2021 using the same filing status as for 2022. Then multiply the tax on the joint return by a fraction, the numerator being the tax you would have paid had you filed a separate return, over the total tax you and your spouse would have paid had you filed separate returns. Enter this amount on line 12b.

• If you didn’t file a return for 2021 or your 2021 tax year was less than 12 full months, don’t complete line 12b. Instead, enter the amount from line 12a on line 12c.

Figuring your 2021 tax. Use the following instructions to figure your 2021 tax.

The tax shown on your 2021 Form 1040 or 1040-SR is the amount on Form 1040 or 1040-SR, line 24, reduced by:

1.Unreported social security and Medicare tax or RRTA tax from Schedule 2 (Form 1040), lines 5 and 6;

2.Any tax included on Schedule 2 (Form 1040), line 8, on excess contributions to an IRA, Archer MSA, Coverdell education savings account, health savings account, ABLE account, or on excess accumulations in qualified retirement plans;

3.Amounts on Schedule 2 (Form 1040) as listed under Exception 2, earlier; and

4.Any refundable credit amounts on Form 1040 or 1040-SR, lines 27a, 28, 29, or 30, and Schedule 3 (Form 1040), lines 9, 12, 13b,13c, 13d, 13g, and 13h.

-6-

Form 1040-ES (2022)

2022 Tax Rate Schedules

Caution. Don’t use these Tax Rate Schedules to figure your 2021 taxes. Use only to figure your 2022 estimated taxes.

Schedule X—Use if your 2022 filing status is

 

Schedule Z—Use if your 2022 filing status is

 

 

Single

 

 

 

 

 

Head of household

 

 

 

 

If line 3

 

The tax is:

 

 

 

If line 3

 

The tax is:

 

 

 

is:

 

 

 

of the

is:

 

 

 

of the

 

But not

 

 

 

 

But not

 

 

 

Over—

 

 

 

amount

Over—

 

 

 

amount

over—

 

 

 

over—

over—

 

 

 

over—

$0

$10,275

$-----------1,027.50

+

10%

$0

$0

$14,650

$-----------1,465.00

+

10%

$0

10,275

41,775

+

12%

10,275

14,650

55,900

+

12%

14,650

41,775

89,075

4,807.50

+

22%

41,775

55,900

89,050

6,415.00

+

22%

55,900

89,075

170,050

15,213.50

+

24%

89,075

89,050

170,050

13,708.00

+

24%

89,050

170,050

215,950

34,647.50

+

32%

170,050

170,050

215,950

33,148.00

+

32%

170,050

215,950

539,900

49,335.50

+

35%

215,950

215,950

539,900

47,836.00

+

35%

215,950

539,900

-----------

162,718.00

+

37%

539,900

539,900

-----------

161,218.50

+

37%

539,900

Schedule Y-1— Use if your 2022 filing status is

 

Schedule Y-2—Use if your 2022 filing status is

 

Married filing jointly or Qualifying widow(er)

 

Married filing separately

 

 

 

 

If line 3

 

The tax is:

 

 

 

If line 3

 

The tax is:

 

 

 

is:

 

 

 

 

of the

is:

 

 

 

 

of the

 

But not

 

 

 

 

But not

 

 

 

Over—

 

 

 

amount

Over—

 

 

 

amount

over—

 

 

 

over—

over—

 

 

 

over—

$0

$20,550

$-----------2,055.00

+

10%

$0

$0

$10,275

$1,027.50---------

+

10%

$0

20,550

83,550

+

12%

20,550

10,275

41,775

+

12%

10,275

83,550

178,150

9,615.00

+

22%

83,550

41,775

89,075

4,807.50

+

22%

41,775

178,150

340,100

30,427.00

+

24%

178,150

89,075

170,050

15,213.50

+

24%

89,075

340,100

431,900

69,295.00

+

32%

340,100

170,050

215,950

34,647.50

+

32%

170,050

431,900

647,850

98,671.00

+

35%

431,900

215,950

323,925

49,335.50

+

35%

215,950

647,850

---------

174,253.50

+

37%

647,850

323,925

-----------

87,126.75

+

37%

323,925

Form 1040-ES (2022)

-7-

2022 Estimated Tax Worksheet

Keep for Your Records

1

Adjusted gross income you expect in 2022 (see instructions)

. . . .

1

 

2a

Deductions

. . . .

2a

 

• If you plan to itemize deductions, enter the estimated total of your itemized deductions.

}

 

 

 

 

 

 

• If you don’t plan to itemize deductions, enter your standard deduction.

 

 

b If you can take the qualified business income deduction, enter the estimated amount of the deduction

2b

c

Add lines 2a and 2b

. . . ▶

2c

3

Subtract line 2c from line 1

. . . .

3

 

4

Tax. Figure your tax on the amount on line 3 by using the 2022 Tax Rate Schedules.

 

 

 

 

Caution: If you will have qualified dividends or a net capital gain, or expect to exclude or deduct foreign

 

 

 

earned income or housing, see Worksheets 2-5 and 2-6 in Pub. 505 to figure the tax . . .

. . . .

4

 

5

Alternative minimum tax from Form 6251

. . . .

5

 

6Add lines 4 and 5. Add to this amount any other taxes you expect to include in the total on Form 1040

 

or 1040-SR, line 16

6

7

Credits (see instructions). Do not include any income tax withholding on this line

7

8

Subtract line 7 from line 6. If zero or less, enter -0-

8

9

Self-employment tax (see instructions)

9

10

Other taxes (see instructions)

10

11a

Add lines 8 through 10

11a

bEarned income credit, refundable child tax credit* or additional child tax credit, fuel tax credit, net premium tax credit, refundable American opportunity credit, section 1341 credit, and refundable

 

credit from Form 8885*

11b

c

Total 2022 estimated tax. Subtract line 11b from line 11a. If zero or less, enter -0- . . .

.

. ▶

11c

12a

Multiply line 11c by 90% (662/3% for farmers and fishermen)

 

12a

 

 

 

 

 

 

 

 

 

 

 

b

Required annual payment based on prior year’s tax (see instructions) . . .

 

12b

 

 

 

 

 

c

Required annual payment to avoid a penalty. Enter the smaller of line 12a or 12b . . .

.

. ▶

12c

Caution: Generally, if you do not prepay (through income tax withholding and estimated tax payments) at least the amount on line 12c, you may owe a penalty for not paying enough estimated tax. To avoid a penalty, make sure your estimate on line 11c is as accurate as possible. Even if you pay the required annual payment, you may still owe tax when you file your return. If you prefer, you can pay the amount shown on line 11c. For details, see chapter 2 of Pub. 505.

13Income tax withheld and estimated to be withheld during 2022 (including income tax withholding on

 

pensions, annuities, certain deferred income, etc.)

. . . . . . . .

13

 

 

 

 

 

 

14a

Subtract line 13 from line 12c

 

14a

 

 

 

 

Is the result zero or less?

 

 

 

 

 

 

Yes. Stop here. You are not required to make estimated tax payments.

 

 

 

 

 

 

No. Go to line 14b.

 

 

 

 

 

b

Subtract line 13 from line 11c

 

14b

 

 

 

 

Is the result less than $1,000?

 

 

 

 

 

 

Yes. Stop here. You are not required to make estimated tax payments.

 

 

 

 

 

 

No. Go to line 15 to figure your required payment.

 

 

 

 

 

15If the first payment you are required to make is due April 18, 2022, enter ¼ of line 14a (minus any 2021 overpayment that you are applying to this installment) here, and on your estimated tax payment

voucher(s) if you are paying by check or money order

15

* If applicable.

Form 1040-ES (2022)

-8-

Record of Estimated Tax Payments (Farmers, fishermen, and fiscal year taxpayers, see Payment Due Dates.)

Keep for Your Records

Payment number

date

 

 

(c) Check or

any convenience fee)

credit applied

(add (d) and (e))

 

 

confirmation number

 

Payment

(a) Amount

(b) Date

money order number, or

(d) Amount paid

(e) 2021

(f) Total amount

 

due

due

paid

credit or debit card

(do not include

overpayment

paid and credited

 

 

 

 

 

14/18/2022

26/15/2022

39/15/2022

41/17/2023*

Total

. . . . . . . . . . . . . . . . . . . . . . . ▶

* You do not have to make this payment if you file your 2022 tax return by January 31, 2023, and pay the entire balance due with your return.

Privacy Act and Paperwork Reduction Act Notice. We ask for this information to carry out the tax laws of the United States. We need it to figure and collect the right amount of tax. Our legal right to ask for this information is Internal Revenue Code section 6654, which requires that you pay your taxes in a specified manner to avoid being penalized. Additionally, sections 6001, 6011, and 6012(a) and their regulations require you to file a return or statement for any tax for which you are liable; section 6109 requires you to provide your identifying number. Failure to provide this information, or providing false or fraudulent information, may subject you to penalties.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as stated in Code section 6103.

We may disclose the information to the Department of Justice for civil and criminal litigation and to other federal agencies, as provided by law.

We may disclose it to cities, states, the District of Columbia, and U.S. commonwealths or possessions to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

If you do not file a return, do not give the information asked for, or give fraudulent information, you may be charged penalties and be subject to criminal prosecution.

Please keep this notice with your records. It may help you if we ask you for other information. If you have any questions about the rules for filing and giving information, please call or visit any Internal Revenue Service office.

The average time and expenses required to complete and file this form will vary depending on individual circumstances. For the estimated averages, see the instructions for your income tax return.

If you have suggestions for making this package simpler, we would be happy to hear from you. See the instructions for your income tax return.

Tear off here

Pay online at www.irs.gov/ etpay

Simple.

Fast.

Secure.

Form

1040-ES

 

 

2022 Estimated Tax

Payment

4

OMB No. 1545-0074

 

Internal Revenue Service

 

 

Voucher

 

 

Department of the Treasury

 

 

 

 

 

 

 

 

 

 

File only if you are making a payment of estimated tax by check or money order. Mail this

Calendar year—Due Jan. 17, 2023

 

 

 

 

 

 

voucher with your check or money order payable to “United States Treasury.” Write your

Amount of estimated tax you are paying

social security number and “2022 Form 1040-ES” on your check or money order. Do not send

by check or

 

 

 

 

cash. Enclose, but do not staple or attach, your payment with this voucher.

money order.

 

 

 

 

 

 

 

 

 

 

 

 

Your first name and middle initial

Your last name

 

 

Your social security number

 

 

 

 

 

 

 

 

 

 

If joint payment, complete for spouse

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or type

Spouse’s first name and middle initial

Spouse’s last name

 

 

Spouse’s social security number

 

 

 

 

 

 

 

 

 

 

 

Address (number, street, and apt. no.)

 

 

 

 

 

 

 

Print

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

City, town, or post office. If you have a foreign address, also complete spaces below.

State

 

 

 

ZIP code

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign country name

 

Foreign province/county

 

 

Foreign postal code

 

 

 

 

 

 

 

 

 

 

 

 

For Privacy Act and Paperwork Reduction Act Notice, see instructions.

Form 1040-ES (2022)

-9-

THIS PAGE INTENTIONALLY LEFT BLANK

-10-

Download PDF Form

Document Specifics

Fact Name Description
Form Purpose Form 1040-ES is designed for individuals to figure and pay their estimated tax for the year 2022.
Applicable Incomes Estimated tax applies to income not subject to withholding, such as earnings from self-employment, interest, dividends, rents, and alimony.
Special Rules for Certain Taxpayers There are specific rules for farmers, fishermen, household employers, and higher income taxpayers regarding the calculation of estimated tax.
Payment Options Individuals can make estimated tax payments online, by phone, or mail through various payment methods provided by the IRS.
Change of Address If an individual's address changes, they should file Form 8822 to update their record with the IRS.

Guide to Writing Us Estimated Tax

Filling out the US Estimated Tax Form 1040-ES requires attention to detail and an understanding of your expected income for the year. This process involves estimating the amount of income you expect to earn, calculating your deductions, and figuring out the credits you may be eligible for. The goal is to estimate accurately so you pay the right amount of tax throughout the year, avoiding underpayment penalties or a large tax bill at year-end. Whether you're self-employed, have income not subject to withholding, or have other complex tax situations, these steps will guide you through completing Form 1040-ES effectively.

  1. Start by gathering your previous year's tax return. You'll need it as a reference to accurately estimate your income and deductions for the current year.
  2. Download Form 1040-ES for the current tax year from the IRS website.
  3. Read the Purpose of This Package section to ensure you understand who must make estimated tax payments and the specific rules that may apply to you, such as for farmers, fishermen, or higher-income individuals.
  4. Review the Exception note to see if you are required to make estimated tax payments for the year.
  5. Check the Special Rules if you fall under the category of farmers, fishermen, certain household employers, or if you are a higher income taxpayer.
  6. Utilize the What's New section to understand any changes from the previous year that might affect your estimated taxes, such as adjustments in the standard deduction amount or social security tax limits.
  7. Proceed to the How To Figure Your Estimated Tax section. Here, you will find instructions on what information and documents you need, how to match your estimated tax payments to your income, and what to do if your income changes significantly during the year.
  8. Use the 2022 Estimated Tax Worksheet provided in the instructions to calculate your estimated tax. Fill in your expected adjusted gross income, taxable income, deductions, and credits for 2022. Refer to your previous year's tax return and adjust the amounts based on expected changes in your income and deductions for the current year.
  9. Refer to the Payment Due Dates to find out when each of your estimated tax payments is due. There are four payment periods throughout the year.
  10. If paying by check or money order, complete the appropriate Estimated Tax Payment Voucher for each payment. Ensure you include your name, address, and social security number on each voucher.
  11. Make your payment by the due date. Consider using electronic payment options for convenience and security.
  12. Keep a record of each payment you make and the date you made it. This information will be important for filing your tax return next year.

If you need to adjust your estimated tax payments after they've been submitted, refer to the section on How To Amend Estimated Tax Payments. Remember, staying informed about tax law changes and keeping accurate records of your income and deductions will help you estimate your taxes more accurately and avoid surprises during tax season.

Understanding Us Estimated Tax

  1. Who needs to make estimated tax payments?

    Estimated tax payments must be made by individuals who expect to owe at least $1,000 in tax for 2022 after subtracting withholdings and refundable credits. This includes U.S. citizens and resident aliens, as well as residents of U.S. territories. Nonresident aliens should use Form 1040-ES (NR) for their calculations. Those who had a tax liability of zero in the previous year may be exempt. Individuals with income not subject to withholding, such as earnings from self-employment, interest, dividends, and alimony, are primarily required to make these payments. It’s also pertinent for those who do not opt for voluntary withholding on other taxable income.

  2. How do I calculate my estimated tax payments?

    To calculate your estimated tax, utilize the 2022 Estimated Tax Worksheet provided in the Form 1040-ES packet. You'll need your previous year's tax return as a guide for your income, deductions, and credits. However, bear in mind any adjustments for the current year based on the "What's New" section. For those with income received unevenly throughout the year, you might benefit from the annualized income installment method, allowing for possibly lower payments during certain periods.

  3. What are the payment due dates for estimated tax?

    For 2022, the IRS has set four deadlines for estimated tax payments: April 18, June 15, September 15, and January 17, 2023. You may opt to pay all your estimated tax by the first deadline or split it into four equal payments by these dates. Note that if you file your 2022 tax return by January 31, 2023, and pay the entire balance due with your return, the payment due on January 17, 2023, is not required. Should you decide to make more than four payments, ensure the total of the amounts paid during any period is at least as much as required by the due date of that period to avoid penalties.

  4. How can I make an estimated tax payment?

    Payments can be made online, by phone, via mobile device, or through mail using a check or money order with the estimated tax payment voucher. Online options include the IRS Direct Pay, available on the IRS website, or through the Electronic Federal Tax Payment System (EFTPS). For phone payments, options include debit or credit card services, with details available on the IRS website. For those who prefer to use cash, in-person payments at retail partners are possible with a registration on the official payment provider's website. If mailing your payment, ensure to use the correct voucher for the corresponding payment period and send it to the IRS address designated for your living area.

Common mistakes

  1. Failing to account for all sources of income: When individuals fill out the US Estimated Tax Form, one common mistake is neglecting to include all taxable income. This includes earnings from self-employment, dividends, interest, rents, and alimony. Not correctly reporting income can lead to underpayment of taxes and potential penalties.

  2. Not understanding special rules for certain types of taxpayers: Special rules apply to farmers, fishermen, household employers, and higher income taxpayers. For example, farmers and fishermen can substitute 66⅔% for 90% in certain calculations if at least two-thirds of their gross income comes from farming or fishing. Ignoring these provisions may result in incorrect estimated tax payments.

  3. Incorrectly calculating withholding and credits: Many individuals incorrectly estimate how much withholding and refundable credits will reduce their total tax liability. It's important to accurately calculate these amounts to ensure the correct estimated tax is paid. Overestimating withholdings and credits can lead to underpayment of estimated taxes and potential penalties.

  4. Not updating estimated taxes after significant changes: Taxpayers often fail to adjust their estimated tax payments after a significant change in income, deductions, or legal tax status occurs during the year. For instance, a large capital gain or a change in business income should prompt a reevaluation and amendment of estimated tax payments to avoid underpayment penalties.

To avoid these mistakes, taxpayers should thoroughly review their entire financial situation, consider special rules applicable to their circumstances, accurately calculate withholdings and credits, and promptly adjust estimated payments in response to significant changes.

Note:

It's crucial to stay informed about the latest tax laws and guidelines, as these can affect estimated tax calculations and payments. The IRS website and Publication 505, Tax Withholding and Estimated Tax, are valuable resources for up-to-date information and detailed instructions.

Documents used along the form

When preparing to handle one's taxes, especially when dealing with estimated taxes, it's critical to be aware of the key forms and documents that often go hand-in-hand with the United States Estimated Tax Form (Form 1040-ES). Understanding each of these documents can simplify the process and ensure one is well-prepared. Below is a brief overview of four crucial forms that individuals frequently use along with Form 1040-ES.

  • Form 1040 or 1040-SR (U.S. Individual Income Tax Return): This is the primary form used by individuals to file an annual income tax return. It's essential for calculating total taxable income, taxes owed, and any refunds due. Taxpayers need this form's information to accurately estimate their taxes for the upcoming year.
  • Form W-4 (Employee's Withholding Certificate): This form is used to tell an employer how much tax to withhold from an employee's paycheck. Adjusting the information on Form W-4 can help prevent underpaying or overpaying taxes throughout the year, which is beneficial when managing estimated payments.
  • Schedule C (Profit or Loss From Business): For those who are self-employed or run a business, Schedule C is used to report income or loss from a business operated or a profession practiced as a sole proprietor. Including this with tax documents helps in determining estimated tax payments more accurately based on business profits or losses.
  • Form 8822 (Change of Address): If a taxpayer moves after filing their last tax return, it’s crucial to submit Form 8822 to the IRS. This ensures that all correspondence, including crucial tax payment information and reminders, reaches the taxpayer at their new address.

Understanding and utilizing these forms in conjunction with the Estimated Tax Form can make managing one’s financial obligations smoother and more efficient. Each document serves a unique purpose in ensuring taxpayers meet their obligations accurately and on time, ultimately aiming to reduce or eliminate potential penalties for underpayment of taxes. It's advisable for taxpayers to familiarize themselves with these forms well ahead of tax season to facilitate a hassle-free tax filing process.

Similar forms

The U.S. Estimated Tax Form 1040-ES is designed for individuals to calculate and pay their tax liability on income not automatically subject to withholding. This concept parallels the requirement of the Form 941, Employer's Quarterly Federal Tax Return, albeit targeting business entities. Form 941 mandates employers to report income taxes, social security tax, or Medicare tax withheld from employee's paychecks and to pay the employer's portion of social security or Medicare tax. Both forms are premiatory instruments in pre-paying taxes to avoid underpayment penalties, illustrating the government's measure to ensure tax collection throughout the fiscal period.

Similarly, Form W-4, Employee's Withholding Certificate, shares a connection with Form 1040-ES, as both deal with tax withholding. While Form 1040-ES is for individuals to estimate taxes on income without withholding, Form W-4 enables employees to shape the amount of tax withheld from their salary. By adjusting the withholdings on the W-4, employees can impact the necessity and amount of estimated tax payments calculated on Form 1040-ES, aiming to optimize tax liability management throughout the year.

Form 1099 series, which includes Form 1099-DIV (Dividends and Distributions) and Form 1099-INT (Interest Income), are also related to Form 1040-ES. These documents report income that typically does not have taxes withheld at the time of payment, making them subject to estimated taxes. Recipients of these incomes use Form 1040-ES to calculate and remit taxes due, illustrating the form's role in broadening the tax base to include various income types beyond wages and salaries.

Form 1040, U.S. Individual Income Tax Return, is directly related to Form 1040-ES. The information from Form 1040-ES feeds into Form 1040, reconciling any overpayment or underpayment of estimated taxes throughout the year. This connection ensures taxpayers' compliance with their annual tax liabilities and allows them to adjust their payments retrospectively based on their actual earnings and deductions, thus closing the tax reporting cycle.

Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, indirectly relates to Form 1040-ES. Taxpayers who fail to settle their estimated tax payments appropriately or foresee a need for more time to file Form 1040 might resort to Form 4868. While Form 4868 does not absolve taxpayers from paying due taxes by the deadline, it underscores the significance of accurate tax estimation and timely payment via Form 1040-ES, highlighting the interconnectedness of tax planning and compliance.

Form W-2, Wage and Tax Statement, though primarily associated with income subject to withholding, underscores the distinction of income types addressed by Form 1040-ES. The need for Form 1040-ES arises from the types of income not covered by Form W-2 withholdings, such as self-employment income or investment earnings, showcasing the comprehensive scope of tax obligations beyond traditional employment.

Schedule C (Form 1040), Profit or Loss from Business, is pertinent for self-employed individuals or sole proprietors who must use Form 1040-ES to pay their estimated tax. Schedule C results influence the tax calculation on Form 1040-ES since business profit impacts the taxpayer’s overall tax liability, emphasizing the role of Form 1040-ES in encompassing a broader spectrum of income sources for tax assessment.

Form 8822, Change of Address, though administrative, is crucial for those filing Form 1040-ES. Accurate address information ensures timely receipt of communication from the IRS regarding estimated tax payments or any discrepancies. This form highlights the logistical aspect of tax management, ensuring the IRS's notices, and instructions correctly reach taxpayers to comply efficiently with their estimated tax responsibilities.

Dos and Don'ts

When it comes to filing the US Estimated Tax Form, it's crucial to approach the task with accuracy and thoroughness. Here are some guidelines to help ensure you manage this responsibility successfully:

Do:

  • Ensure all your income sources are accurately reported. This includes earnings from self-employment, interest, dividends, rents, and any other income not subject to withholding.

  • Update your address using Form 8822 if you have moved. This prevents any delays or miscommunications with the IRS.

  • Consider using the IRS Direct Pay for a secure and direct way to make payments. This method reduces errors and ensures your payments are processed timely.

  • Use the correct voucher number when making more than four estimated tax payments in a year to avoid misapplied funds.

Don't:

  • Overlook the special rules if you are a farmer, fisherman, or higher income taxpayer, as these can affect your payment percentages and deadlines.

  • Forget to include household employment taxes in your estimated tax if applicable. This is essential for accurate calculation of what you owe.

  • Delay your payments, as this can lead to penalties for underpayment or late payment. Adhering to the payment due dates is imperative.

  • Use your ITIN in place of an SSN if you have been issued an SSN. Always use your most current identification number to ensure your account is correctly credited.

Misconceptions

When it comes to managing taxes, the Form 1040-ES, or the Estimated Tax for Individuals, is a tool many taxpayers may need to use, yet misunderstandings about its purpose and use are common. Here are five misconceptions about the U.S. Estimated Tax form explained in simpler terms.

  1. Only Self-Employed Individuals Need It: A common misconception is that Form 1040-ES is solely for the self-employed. In fact, anyone who earns income not subject to withholding, such as interest, dividends, rents, alimony, or certain unemployment compensation, might need to make estimated tax payments to avoid penalties.

  2. Estimated Taxes Are Paid Once a Year: Some people wrongly believe that estimated taxes are handled in one annual payment. Rather, estimated taxes are typically paid quarterly to cover income not subject to withholding. Missing these quarterly payments can lead to penalties.

  3. If You Pay Estimated Taxes, You Don't Have to File an Annual Return: This is not true. Paying estimated taxes doesn’t exempt you from filing an annual tax return. Form 1040-ES is a way to pay taxes on income that isn’t automatically withheld throughout the year, and an annual return reconciles your total tax liability with the amounts you've already paid.

  4. Estimated Payments Are Complicated to Calculate: While it might seem daunting, calculating estimated tax payments can be straightforward with the right information. Using your prior year’s tax return as a guide can help you estimate your income and deductions for the current year. Additionally, the IRS provides a worksheet in the Form 1040-ES instructions to assist taxpayers.

  5. Overpayments Result in Penalties: There’s a misconception that overpaying your estimated tax leads to penalties. Actually, overpaying could mean you’re giving the government an interest-free loan, but it won’t trigger penalties. Penalties are generally applied for underpaying your tax obligation, not overpaying it.

Understanding these misconceptions about the Form 1040-ES can lead to more accurate tax payments and less stress during tax season. Remember, when in doubt, consulting the IRS guidelines or seeking advice from a tax professional can help navigate the nuances of estimated tax payments.

Key takeaways

Filling out and using the US Estimated Tax Form, commonly known as Form 1040-ES, is an important process for individuals to manage their tax payments throughout the year. Below are ten key takeaways to guide you through this process:

  1. Use Form 1040-ES to calculate and pay estimated taxes on income not subject to withholding, such as earnings from self-employment, interest, dividends, rents, and alimony.
  2. Estimated tax payments are also necessary for other taxable income, like unemployment compensation and the taxable part of social security benefits, if no voluntary withholding is chosen.
  3. Special rules apply to farmers, fishermen, certain household employers, and higher income taxpayers, adjusting the general percentage used to calculate estimated taxes.
  4. If you expect to owe at least $1,000 in tax for the year after subtracting withholdings and credits, you are required to make estimated tax payments.
  5. Payments can be made in four equal amounts by the due dates specified in the form, with options to pay all your estimated tax by the first due date.
  6. If your address has changed, it's crucial to update your records by filing Form 8822 to prevent miscommunication with the IRS.
  7. There are penalties for underpayment or late payments of estimated taxes, though the IRS may waive penalties under certain conditions.
  8. Payment methods include online, phone, mobile device, check, or money order. Choosing electronic payment methods can expedite the process and ensure timely receipt by the IRS.
  9. Income subject to social security tax has a maximum amount that changes yearly, affecting your total estimated tax.
  10. If changes in income or tax circumstances occur after you've begun making estimated tax payments, you may need to amend your estimated tax payments to avoid a penalty.

To smoothly navigate through paying your estimated taxes, stay informed about any changes in tax legislation that affect Form 1040-ES and regularly review your income throughout the year to adjust your payments as necessary.

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