Payment of Estimated Income Tax in the United States - Estimated Tax

Do you know how the Federal Income Tax payment works in the United States? Here you need to pay income tax during the current year and then adjust this on your annual return.

An individual who expects to pay at least $1,000 in income tax during the current year is required to collect at least 90% of the estimated amount, for example, if you believe you will have $5,000 in tax to pay then you must prepay at least $4,500. Those who believe they will have less than $1,000 in tax to pay are exempt from the prepayment and can pay the assessed amount with their annual return the following year. To find out the approximate amount you may incur during the year according to your earnings you can go to the IRS website and simulate to find out how much tax you can expect to pay, or consult a tax professional you trust.

For individuals, payment can be made by sending a check to the IRS or through the government's website, indicating your information, the year of collection to which it refers, and the amount you wish to collect.

For companies that expect to pay $500 or more in taxes, they must also collect at least 90% of the estimated amount. The rules are similar to those for individuals, but the form of payment changes depending on whether the company is a Corporation or an LLC. Payment can be made by sending a check to the government or by requesting automatic debit through the EFTPS - Electronic Federal Tax Payment System, which requires an advance registration.

For both cases, individuals or companies, in general the estimated payments are divided and must be paid in 04 (four) installments, 25% of the annual amount provided in each of the four dates set for payment by the government, are as follows:

April 15th - 1st Annual Payment

June 15th - 2nd Annual Payment

September 15th - 3rd Annual Payment

December 15th - 4th Annual Payment for Companies

January 15th of the following year - 4th Annual Payment for Individuals

The text above explains how the Federal Income Tax paid to the IRS works. If you live in a US state that also requires State Income Tax, for example Georgia, California or New York, you should check the legislation of that state, since each one has its own rules.

Need help paying taxes for your individual or business? Contact us today and we will be ready to help you.