What is Form 1040-ES?
Form 1040-ES, Estimated Tax for Individuals, is a tax form by the Internal Revenue Service (IRS) taxpayers use to calculate and pay estimated quarterly taxes.
According to the IRS, “estimated tax is the method used to pay tax on income that is not subject to withholding. For example, earnings from self-employment, interest, dividends, rents, alimony, etc. In addition, if you do not elect voluntary withholding, you should make estimated tax payments on other taxable income, such as unemployment compensation and the taxable part of your social security benefits.”
Unlike Form 1040, Individual Income Tax Return, which taxpayers use to file their income tax return from the previous tax year, Form 1040-ES calculates the first to third-quarter taxes of the current year and fourth-quarter taxes of the previous year separately, depending on which is due.
Who pays estimated taxes?
Individuals who need to pay estimated taxes are self-employed professionals. They may be independent contractors and freelancers who do not have an employer and whose income is not subject to withholding.
Estimated taxes apply to U.S. citizens, resident aliens, residents of Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa, and non-resident aliens. Non-resident aliens must use Form 1040-NR, US Nonresident Alien Income Tax Return.
In general, if both of the following conditions apply to you, you must pay estimated taxes:
- You expect to owe at least $1,000 in tax after subtracting your withholding and refundable credits.
- You expect your withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on your tax return, or
- 100% of the tax shown on your previous tax year’s return.
When are estimated taxes due?
Taxpayers need to pay estimated tax payments four times per year. The following are the due dates for paying estimated quarterly taxes:
- January 15 for earnings from September 1 through December 31 of the previous year
- April 15 for earnings from January 1 through March 31
- June 15 for earnings from April 1 through May 31
- September 15 for earnings from June 1 through August 31
When the due date falls on a legal holiday or weekend, the next business day becomes the new due date.
How to fill out Form 1040-ES?
Form 1040-ES contains several parts. Follow the instructions below to fill out the form accurately.
Self-Employment Tax and Deduction Worksheet for Lines 1 and 9 of the Estimated Worksheet
Provide all your expected earnings subject to self-employment tax.
Provide you expected Conservation Reserve Program payments if you will have farm income and receive social security retirement or disability benefits.
Subtract Line 1b from Line 1a.
Multiply Line 2 by 92.35%.
Multiply Line 3 by 2.9%.
This line shows the social security tax maximum income.
Provide your expected wages (if subject to social security tax or the 6.2% portion of tier 1 railroad retirement tax).
Subtract Line 6 from Line 5.
Provide the smaller of Line 3 or Line 7.
Multiply Line 8 by 12.4%.
Add Lines 4 and 9. Enter the sum on Line 202 of your Estimated Tax Worksheet.
Multiply Line 10 by 50%. The result will be your expected deduction for self-employment tax on Schedule 1 (Form 1040, Individual Income Tax Return, or 1040-SR, Tax Return for Seniors), Line 14. Subtract the amount when figuring your expected Adjusted Gross Income (AGI) on Line 1 of your Estimated Tax Worksheet.
Estimated Tax Worksheet
Enter the Adjusted Gross Income you expect.
Enter your deductions. If you plan to itemize deductions, enter the estimated total of your itemized deductions; otherwise, enter your standard deduction.
Enter the estimated amount of the deduction if you can take the qualified business income deduction.
Add Line 2a and Line 2b.
Subtract Line 2c from Line 1.
Provide tax amount.
Enter alternative minimum tax from Form 6251.
Add Line 4 and Line 5.
Add any applicable credits.
Subtract Line 7 from Line 6.
Enter your self-employment tax.
Enter other applicable taxes.
Add Lines 8 through Line 10.
Enter earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, refundable American opportunity credit, and refundable credit from Form 8885.
Enter total estimated tax by subtracting Line 11b from Line 11a.
Multiply Line 11c by 90%.
Enter the required annual payment based on the previous year’s tax.
Enter the smaller amount of Line 12a or Line 12b.
Enter income tax withheld and estimated to be withheld.
Subtract Line 13 from Line 12c. If the result is zero or less, you are not required to make estimated tax payments. Otherwise, go to Line 14b.
Subtract Line 13 from Line 11c. If the result is less than $1,000, you are not required to make estimated tax payments. Otherwise, go to Line 15 to figure out your required payment.
Follow the provided computation.
Provide the amount of estimated tax you are paying in the following format: Dollars, Cents.
Provide your full legal name in the following format: First Name, Middle Initial, Last Name.
Provide your Social Security Number.
If joint payment, provide your spouse’s full legal name and Social Security Number.
Provide your full residential address. If a foreign address, provide the foreign country name, foreign province or county, and postal code.
How to pay estimated tax?
- EFTPS — go to IRS.gov/Payments or EFTPS.gov.
- Mobile Device — download the IRS2Go app.
- Cash — Cash is an in-person payment option for individuals provided through retail partners with a maximum of $1,000 per day per transaction. See the “How to Amend Estimated Tax Payments” section of Form 1040-ES for more details.
- Check or Money Order Using the Estimated Tax Payment Voucher — See the “How to Amend Estimated Tax Payments” section of Form 1040-ES for more details.
Where to file Form 1040-ES?
Where you will send your Form 1040-ES will depend on where you live. For a complete list of mailing addresses, see the “Where to File Your Estimated Tax Payment Voucher if Paying by Check or Money Order” section of Form 1040-ES.