Basics of estimated taxes for individuals Internal Revenue Service

Estimated Tax

The fastest way to receive a tax refund is to file electronically and choose direct deposit, which securely and electronically transfers your refund directly into your financial account. Direct deposit also avoids the possibility that your check could be lost, stolen, destroyed, Estimated Tax or returned undeliverable to the IRS. Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to for more information on where to find a bank or credit union that can open an account online.

  • Use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts (or Form 2220, Underpayment of Estimated Tax by Corporations), to see if you owe a penalty for underpaying your estimated tax.
  • You provide this statement by signing Form W-2G or, if required, Form 5754.
  • During the year, changes may occur to your marital status, adjustments, deductions, or credits you expect to claim on your tax return.
  • If you receive gambling winnings not subject to withholding, you may need to pay estimated tax.
  • Go to to download current and prior-year forms, instructions, and publications.

Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. If you expect to claim itemized deductions on your 2023 tax return, enter the estimated amount on line 2a. If you receive $10 or more in unemployment compensation, you will receive a Form 1099-G, Certain Government Payments. Box 1 will show the amount of unemployment compensation you got for the year.

Worksheet 2-10. Amended Estimated Tax Worksheet

Next, we’ll dive a little deeper to see how much you’ve already paid in taxes this year. For many, this is the amount withheld from their paychecks by an employer. View how much tax you may pay in other states based on the filing status and state entered above. Either way, you’ll use IRS Form 1040-ES to show your income estimate and project your tax liability. IRS Publication 505 has all the rules and details, and good tax software will help you fill out the form and do the math.

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You worked last summer and had $375 federal income tax withheld from your pay. The entire $375 was refunded when you filed your 2022 return. Using Figure 1-A, you find that you can claim exemption from withholding.

Tax on lump-sum payment from Social Security

The later in the year you change your Form W-4, the more important it is that you submit a new form the following January.. There are civil and criminal penalties for giving false information to avoid backup withholding. The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. However, the payer will provide additional instructions if the TIN you gave needs to be validated by the Social Security Administration or by the IRS.

Then, multiply the tax on the joint return by the following fraction. If you plan to file a joint return with your spouse for 2023, but you filed separate returns for 2022, your 2022 tax is the total of the tax shown on your separate returns. You filed a separate return if you filed as single, head of household, or married filing separately.

Who Must Pay Estimated Tax

You may want to use it to boost your emergency fund, save for retirement or make an extra student loan or mortgage payment. You could end up owing the IRS an underpayment penalty in addition to the taxes that you owe. The penalty will depend on how much you owe and how long you have owed it to the IRS. We’ll calculate the difference on what you owe and what you’ve paid. If you’ve already paid more than what you will owe in taxes, you’ll likely receive a refund.

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