What Are They?
Estimated taxes are levy on income not subject to withholding, such as income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards, additional salary and other income that exceeds the withholding amount.
Any individual or entity who anticipates accruing annual income more than $1,000 after deducting withholding taxes need to make quarterly payments. The payment schedule is quarterly, with specific payment due dates of April 15, June 15, September 15, and January 15. The taxpayer has the liberty of making payment in any number of installments, such as weekly, bi-weekly, monthly, or any other, provided the amount due for the quarter is paid in full by the due date for the quarter. The best way to make a payment is through the Electronic Federal Tax Payment System (EFTPS) system, which allows payment tracking and history.