J.K. Lasser's Your Income Tax 2014: For Preparing Your 2013 Tax Return

Chapter 27

Estimated Tax Payments

27.1 Do You Owe an Estimated Tax Penalty for 2013?

27.2 Planning Estimated Tax Payments for 2014

27.3 Dates for Paying Estimated Tax Installments for 2014

27.4 Estimates by Husband and Wife

27.5 Adjusting Your Payments During the Year

Income taxes are collected on a pay-as-you-go basis through withholding on wages and pensions, as well as quarterly estimated tax payments on other income. Where all or most of your income is from wages, pensions, and annuities, you will generally not have to pay estimated tax, because your estimated tax liability has been satisfied by withholding. But do not assume you are not required to pay simply because taxes have been withheld from your wages. Always check your estimated tax liability. Withholding may not cover your tax; the withholding tax rate may be below your actual tax rate when considering other income such as interest, dividends, business income, and capital gains.

Your withholdings and estimated tax payments must also cover any liability for self-employment tax, alternative minimum tax (AMT), the additional 0.9% Medicare tax on earnings, the additional 3.8% Medicare tax on net investment income, and FICA withholding tax for household employees.

If you expect your 2014 tax liability to be $1,000 or more after taking into account withheld taxes and refundable credits, you should make quarterly estimated tax payments unless you expect the withholdings and credits to be at least 90% of your 2014 total ...