Estimated Tax Payments

United States Tax Concept of Estimated Tax Payments

Advance payment of current tax liability by making installment payments of your estimated tax liability. You may be required to make estimated tax payments if a significant amount of your income is not subject to withholding, such as net income from a business or investment income. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.