Who is required to make Estimated Payments?
The IRS has set up rules to determine whether or not you are supposed to pay in your taxes on a quarterly basis during the year (or pay a penalty for failing to do so). There are several factors. First, if your total federal tax bill is under $1,000 for the year, you are not required to pay quarterly. Next, if your annual tax liability exceeds $1,000, then you are required to pay estimated taxes equal to the lesser of: a) 100% your previous year’s tax or b) 90% of your current year’s tax.
