How Do You Make Installment Payments To The IRS?
The federal tax system is a pay-as-you go system which means that as you earn income you must make estimated tax payments. For most people who work as employees, the money is automatically withheld from their paychecks. However, if you are self-employed or do not have enough income withheld from your paycheck, you must make quarterly installment payments to the IRS. Look up the amount of tax you paid the previous year on your prior year’s tax return. Estimate the amount of tax you expect to owe at the end of the current year. If you are uncertain about this amount because of unemployment, being paid on a commission, or some other reason, skip this step. Calculate the minimum amount of withholding payments you will be required to make over the course of the year based on the prior year’s payments. If your adjusted gross income is more than $75,000, you can pay 110 percent of the prior year’s tax. If your adjusted gross income is below $75,000, you can pay 100 percent of your prior year’
