What is an Estimated tax payment?

An estimated tax payment is a quarterly advance payment of federal and state income taxes made by taxpayers whose income is not subject to adequate withholding. Business owners, self-employed individuals, investors, and others with substantial income from sources other than wages must calculate and remit estimated payments to avoid underpayment penalties. The federal quarterly due dates are April 15, June 15, September 15, and January 15 of the following year. Payments can be calculated using the prior-year safe-harbor method (100% of prior-year liability for most taxpayers, 110% for high-income individuals) or the current-year method (90% of expected current-year liability). Individuals and businesses can adjust payments throughout the year using the annualized income installment method when income is unevenly received. Proper estimated tax management prevents year-end surprises and optimizes cash flow.

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Child & dependent tax credits

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