Who Needs Form 1040-ES?
Form 1040-ES is Estimated Tax for Individuals. It is created for self-employed individuals, small business owners, freelancers and independent contractors. These are individuals who rarely have income tax withheld from their earnings and those who satisfy the following criteria:
- You’re expected at least $1,000 in tax for the current year
- The estimated withholding and credits are less than 90% of the tax expected or 100% of the whole tax liability recorder in the return for the previous year.
A taxpayer doesn’t have to pay estimated taxes if:
- They were not asked to pay taxes for the previous year
- They were US citizens or residents in the previous tax year
- The previous tax year was no less than 12-month long.
What is Form 1040-ES for?
Form 1040-ES aims to make estimated tax payments to the IRS for the current year. Besides income earned as a result of freelance work, there are other income categories that require estimated tax payment. They are as follows: dividends, rent, retirement benefits, unemployment compensation, etc. Since estimated tax must be calculated for the current year, it is easy to make a mistake and enter wrong numbers. Such mistake in its turn may result in underpayment and penalty. To avoid confusion when calculating estimated tax, it is recommended that a taxpayer follow previous year’s taxes.
Is Form 1040-ES Accompanied by Other Forms?
Form 1040-ES is accompanied by the estimated tax payment voucher in case the payment is done by the money order or paycheck.
When is Form 1040-ES Due?
Estimated payment is made four times a year according to the following schedule:
- 15th of April for the income earned from the 1st of January till the 31st of March
- 15th of June for the income earned from the 1st of April till the 31st of May
- 15th of September for the income earned from the 1st of June till the 31st of August
- 15th of January for the income earned from the 1st of September till the 31st of December.
How Do I Fill out Form 1040-ES?
Form 1040-ES consists of twelve pages including instructions and worksheets that aren’t sent anywhere. A filer must keep them for the records. The main information about estimated tax is provided in the payment voucher. A filer must enter their name, address, SSN and a spouse’s SSN.
Where Do I Send form 1040-ES?
First, enter the name of the form and the current year on the money order or pay check. Then mail the payment voucher to the address that corresponds to the place where you live.