Q:

Who should use a 1040-ES estimated tax form?

A:

Quick Answer

IRS Form 1040-ES is for individuals who are subject to U.S. income tax but have income that does not have taxes withheld. This can include rental income, alimony, interest income, self-employment income and any other type of taxable income.

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Full Answer

As of 2015, Form 1040-ES is required for most people who expect to owe at least $1,000 in tax for the year and who expect that their total tax withholding and refundable credits for the year amount to less than the smaller of 90 percent of total taxes for the current year or 100 percent of the tax shown on the tax return for the previous year.

These rules vary for farmers, fishermen, certain higher income taxpayers and certain household employers. It is important to carefully read the instructions on the form or consult a tax professional to ensure that the form is completed as required. IRS Publication 505 has additional information about estimated tax and tax withholding.

People who derive some of their income from regular employment and some of their income from sources that are not subject to withholding, such as rental income or self-employment, may be able to avoid making payments for estimate tax by increasing the amount withheld from their regular employment income. This can be accomplished by filing a new Form W-4.

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