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Tips for Paying Estimated Taxes

TurboTax Staff

Generally speaking, anyone who owes more than $1,000 in a given tax year, after subtracting withholding and refundable credits, is required to pay quarterly estimated taxes. Traditionally this applied to high income taxpayers because of revenues from sources such as interest, dividends or rent. Salaried individuals and those paid hourly wages typically do not pay estimated taxes. Their federal income taxes are withheld from their wages throughout the year by their employers. Self-employed individuals, however, are solely responsible for ensuring that their federal income taxes are paid at the right time. Here are a few tips for paying estimated taxes to help self-employed taxpayers avoid mistakes that may result in penalties and interest.

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