To submit the quarterly income tax payments, you must file the IRS 1040-ES, where ES stands for estimated taxes. It's simple to figure out your anticipated yearly tax liability using the 1040-ES.
In this manner, the government can keep track of the total amount of income tax you have paid during the year.
Tax on income that isn't subject to withholding (such as self-employment income, interest, dividends, rent, alimony, etc.) must be paid using the estimated tax method.
Furthermore, if you don't choose voluntary withholding, you must pay anticipated taxable income on other tax liabilities.
Who Needs to File Form 1040-ES?
If you’re self-employed, such as a freelancer, you must file Form 1040-ES.
If you receive taxable income that is not required to have federal income tax withheld, such as salary and wages or voluntarily withheld, such as unemployment and retirement benefits, you must complete the 1040-ES.
Additionally, you must complete the 1040-ES if you receive additional income that is not taxed at source, such as self-employment income, interest, dividends, rent, and alimony payments.
Furthermore, businesses are required to submit Form 1040-ES in the circumstances stated below:
After deducting your withholding and refundable tax credits, you anticipate a tax liability of at least $1,000 a year.
You anticipate that the refundable credits plus withholding will be lower than the smaller of (i) 90% of the taxes that will be displayed on your yearly tax return or (ii) 100% of the taxes indicated on your yearly tax return.
When Do You Need to Fill the Form 1040-ES?
You can pay your estimated tax in whole or four equal installments by the dates listed below.
Note: If a deadline falls on a legal holiday or the weekend, the form must be submitted the next working day.
Are there any Penalties if I Don't File Form 1040-ES on Time?
When filing your return, you may, in some circumstances, owe a penalty. Each underpayment will be subject to a fine based on how many days it goes unpaid. Even if you overpay your tax return, there could still be a penalty.
Are there Any Exceptions to Filing Form 1040-ES?
You don’t have to pay estimated tax if you meet the following conditions:
You were a citizen or resident alien of the United States for the whole year.
You did not owe any taxes for the previous year.
Your prior tax year covered a 12-month period.
Where Can You File Form 1040-ES?
You may print out the 1040 ES form from the IRS official website and manually complete it, or you can electronically complete it on the IRS website.
There is an estimated payment voucher for every due date if you mail the payment. The table below contains the due date.
You should fill out and mail the voucher if your payment is made by cheque or money order.
If you wish to file it electronically, you may visit the official website of the IRS. In this case, you may opt for the option below to make the payment.
How Should I Fill Out the Form?
You can fill out Form 1040-ES quickly with some essential data. You need to fill in your details, including your name, address, social security number, and the amount you need to pay.
You may see the due date deadline on the top right corner of the form. To ensure things go right, follow the instructions before filling out the form.
How to Calculate Estimated Taxes?
You can calculate estimated tax based on current income. You might start with the federal tax return from the prior year to aid in the estimation.
The best way to look at the data from the prior year is taxable income, credits, taxes paid, and deductions. And when you compare it to the current year's income, you will get an estimate of the taxes.
Where Do I Need to Mail Form 1040-ES?
The IRS states that you must send a check or money order along with your estimated tax payment voucher. The address for mailing the payment will depend on your location.
Below are the state-wise postal addresses to mail your Form 1040-ES. You may choose as per your location.
Mailing Payment Voucher
Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Tennessee, Texas
Arkansas, Connecticut, Wisconsin, Delaware, District of Columbia, Illinois, Iowa, Maine, Virginia, Maryland, West Virginia, Massachusetts, Missouri, New Hampshire, Vermont, New Jersey, Oklahoma, New York, Indiana, Rhode Island, Kentucky, Minnesota
A foreign nation, American Samoa, and Puerto Rico (or they are exempt from earnings per Internal Revenue Code 933), and have an APO, FPO address, or submit Form 2555 or 4563, or a temporary citizen of Guam or citizen of the U.S. Virgin Islands
Residents of these states must mail the form to Guam
What if I have Changed My Name?
There may be a few cases where you have changed your name due to marriage, divorce, or other life events, and you paid anticipated tax under your old name.
In such a case, you must attach a statement including all of the estimated tax contributions you and your spouse paid together for a specific year. You must also attach SSN(s) under which you made the payments.