Estimated Taxes

Federal income tax is a pay-as-you-go tax which means you must pay the tax as you earn or receive income during the year. For example, when you work for someone else, taxes are typically deducted from each paycheck. Now that you work for yourself it is your responsibility. You generally have to make estimated tax payments if you expect to owe tax, including SE tax, of $1,000 or more when you file your return. There are two ways to pay as you go: withholding and estimated taxes. If you are a self-employed individual and do not have income tax withheld, you must make estimated tax payments.