Q:

When do you start paying quarterly estimated taxes?

A:

Quick Answer

Self-employed individuals who expect to owe at least $1,000 in annual taxes, and corporations which owe at least $500 in annual taxes, have to pay quarterly estimated taxes. Owed tax amounts lower than these limits are not generally subject to estimated taxes.

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Full Answer

Quarterly estimated taxes are required for individuals, certain small business owners and corporations that do not pay taxes on earned income. Taxable sources include income from contract work, rent, awards and interest payments. Taxpayers who do not have enough income tax withheld from their earnings may also pay estimated taxes on the remaining amount. Failure to pay enough in estimated taxes throughout the year sometimes results in a penalty fee being assesses.

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