Who Does Not Pay Estimated Taxes?

Self-employed:

If you're self-employed and also have a job you can avoid having to make estimated federal tax payments.

Here's how:

Current tax year

You do not have to pay estimated tax for the current tax year if you satisfy all three of the following conditions.

  • You had no tax liability for the previous tax year.
  • You were a U.S. citizen or resident alien for the whole year.
  • Your previous tax year covered a 12-month period.

You had no tax liability for the previous tax year if your total tax was zero or you did not have to file an income tax return.

Employees:

An employee who does not expect any other taxable income for the current tax year, other than his salary, and does not expect to owe $1,000 or more AFTER subtracting federal income taxes withheld and any tax credits, generally will not have to pay estimated taxes for the current tax year.

If you pay at least 90% of the current year's tax liability or 100% or the previous year's tax liability, you won't be required to pay estimated taxes.

File your personal and small business taxes (Schedule C)