How do you know if you have to file quarterly individual estimated tax payments?

You must make estimated tax payments for the current tax year if both of the following apply:

• You expect to owe at least $1,000 in tax for the current tax year, after deducting your withholding and credits.

• You expect your withholding and credits to be less than the smaller of:

  • 90% of the tax to be shown on your current year's tax return, or

  • 100% of the tax shown on your prior year's tax return. (Your prior year tax return must cover all 12 months.)

There are special rules for:

• Aliens

• Certain small business taxpayers for any tax year beginning in 2009

• Certain taxpayers with higher adjusted gross income

• Estates and Trusts
• Farmers and commercial fishermen