You must make estimated tax payments for the current tax year if both of the following apply:
- You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of:
- 90 percent of the tax to be shown on your current year's tax return, or
- 100 percent of the tax shown on your prior year's tax return. (Your prior year tax return must cover all 12 months.)
There are special rules for:
- Certain small-business taxpayers
- Certain taxpayers with higher adjusted gross income
- Farmers and commercial fishermen
- Estates and trusts
See IRS Pub 505 for more details.