Estimated Tax


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Related to Estimated Tax: estimated tax return

Estimated tax

Tax to be paid quarterly on income that is not subject to withholding tax, including self-employed income, investment income, alimony, rent, and capital gains.

Estimated Tax

Taxes paid to the IRS on a quarterly basis on all income not subject to withholding. Estimated taxes most prominently affect self-employed persons, but they must also be paid on alimony, rents, and capital gains. Persons who file estimated taxes must also file 1040 forms and, if necessary, pay any taxes they may have underpaid on their estimated taxes.

estimated tax

The estimated tax liability on income that is not subject to withholding. Individuals with even moderate investment income are generally expected to file a declaration of estimated tax and to pay quarterly installments on the estimated tax liability.

Estimated Tax

The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts withheld and the amount of any expected credits.
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Currently, there is no rehable way to communicate to the IRS and state taxing authorities that the estimated tax payments belong to the spouse, even though they are under the taxpayer's Social Security number since the taxpayer is listed first.
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Alternatively, individuals can pay estimated tax by paying a specified percentage of the current year's tax, computed by "annualizing" the taxable income for the months in the taxable year ending before the month in which the installment falls due.
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As a practical matter, taxpayers may pay estimated income taxes more frequently than quarterly, but this is not explicit in the Code and might not be obvious on Form 1040-ES, Estimated Tax for Individuals, or its instructions.
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