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Estimated Tax Payment Timing

What is Estimated Tax Payment Timing?

Estimated Tax Payment Timing is a calculation that determines how much a taxpayer should pay for quarterly estimated payments, as well as the timing of these payments. Due four times per year, quarterly estimates may need to be paid by taxpayers in order to avoid the underpayment penalty.  

What are the Advantages of Estimated Tax Payment Timing?

Estimated Tax Payment Timing allows taxpayers to pay their annual tax liability in quarterly installments and also helps avoid any state and federal underpayment penalties. Estimated Tax Payment also naturally allows for taxpayers to track their progression of income and expense throughout the year, as it is mandatory to have a reasonable idea of these figures to compute accurate Estimated Tax Payment Timing. Additionally, those making state Estimated Tax Payments will benefit from itemizing those payments on their federal tax return.  

Who qualifies & why should you adopt?

If your expected tax due is over $1,000, and your total withholdings throughout the year are less than 100% of prior year taxes, or 90% of current year taxes, you must elect Estimated Tax Payment Timing. This route of tax payment is particularly important for sole-proprietors and small business owners who lack a tax withholding on their income figures.

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