To fill out a 1040 ES form for estimated taxes, use the income you made the previous year in order to estimate taxes for the current year, explains TurboTax. By paying 100 percent of the previous year's taxes, you won't be subject to a penalty by the IRS.Continue Reading
A 1040 ES form is used if you are self-employed or an independent contractor and don't have income taxes deducted from pay you receive throughout the tax year, explains TurboTax. Estimating taxes for the current year mean you may overpay or underpay, but the IRS does not penalize you if you pay the same amount of taxes you paid last year, even if you may owe more fur the current year. If you overpay your taxes, you receive a refund at the end of the year.
When preparing the 1040ES, look at your taxable income, deductions and credits for the previous year, and compare that amount to the current year's amount, recommends TurboTax. The 1040ES includes worksheets that can help you calculate the amount of tax you may owe for the current year, helping you to account for the difference between the two years. Estimated tax payments are due four times per year.Learn more about Taxes