This form can be used to estimate taxes on your income and pay estimated tax. You can use this form to estimate tax for regular or fluctuating seasonal incomes. Estimated tax is used pay tax on income on which there is no withholding for example income from self-employment, dividends, or rents etc. If you do not choose voluntary withholding tax you still should pay estimated tax on other taxable income like taxable part of social security and unemployment stipend.
Denizens of United States, and resident aliens are liable to pay Estimated Tax.
a. Your expected is $1,000 or more for 2015 after eliminating withholding and refundable credits
b. Expected Withholdings are less than the smaller of
You can spare the effort to make additional tax payments by asking your employer to deduct some more tax out of your earnings and submit it on your behalf. Use form W-4 for this.
Special rules have been devised for farmers, fishermen, high income employers and household employer to facilitate them in making estimated tax payments.
Step1Farmers and Fishermen:
If at least 67% or two-thirds of your total income comes from farming or fishing then your tax is the smaller of the following
0.66667 x your total income for 2015.
Total tax shown on your 2014 return.
Step2House hold employers:
While estimating the tax Include the following on your 2015 tax return while estimating the tax. Include your household employment tax. Your tax will be withheld from the pensions, wages, annuities and other wins like from gambling. Everyone is required to make estimated tax payments to avoid getting penalized, even if that person did not include household employment taxes when figuring her estimated tax.
If your income vacillates during the year for example seasonal sales etc, you can lower or completely eradicate the amount of your tax for one or more periods by using annualized income installment method.
1
Do not pay any estimated tax for 2015 if you had no liability for full tax year of 2014.It means that your tax return was zero during 2014 or you were not required to file income tax return. You must be a US citizen or resident alien for this to have effect.
2
You are eligible for advance payments of premium tax credit to help pay for insurance if you bought health care insurance through Health Insurance Market Place
3
More than four estimated tax payments can be made by making a copy of your unused estimated tax form, fill and mail it with payment. If sum of the amounts paid during a payment periods is less than amount due by the end of that period, you will be penalized.
4
Join Estimated Tax payments are not allowed if you or your spouse is a non-resident alien in United States, or both of you are separated by legal divorce.
5
It’s worth noting that individuals of same sex or opposite sex who are in a civil union or contract which is not considered as marriage are not allowed to make joint payments.
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