Federal income tax is a pay-as-you-go tax. This means the tax must be paid as income is
earned or received. Tax is generally withheld from your wages or salary before you get it,
and may also be withheld from other types of income such as pensions and unemployment compensation if requested.
However, tax is generally not withheld from income such as alimony, interest, dividends,
rental income, self-employment income, and capital gains. You may be required to pay estimated
tax on these types of income. Estimated tax is the method of paying tax on income not subject
to withholding and on other income from which not enough tax is withheld. You do not have
to make estimated tax payments if your 1999 tax return will show a refund, or a balance due
of less than $1,000.
Generally, you should make estimated tax payments for 1999 if you will owe tax of $1,000 or more,
after withholding and credits, and the total amount of tax withheld and your credits will be
less than the smaller of:
- 90% of the tax to be shown on your 1999 tax return, or
- 100% of the tax shown on your 1998 tax return, if your 1998 tax return covered all 12 months
of the year. However, if your 1998 adjusted gross income exceeded $150,000, or $75,000 if you
filed a separate return from your spouse, then you must pay 105% instead of 100% of last year's tax.
Get Form 1040ES to help you figure your estimated tax liability for 1999.
Your first estimated tax payment for 1999 is due April 15th. You may pay the entire year's
estimated tax at that time, or you may pay your estimated tax in four payments.
The four payments are due April 15th, June 15th, September 15, 1999, and January 18,
2000. You may have to pay a penalty if you do not pay enough tax through withholding
or estimated tax payments, or if you fail to make required estimated tax payments by
the due dates. Estimated tax payments can be used to pay federal income tax, self-employment tax,
and household employment tax. Topic 306 provides additional information
on the estimated tax penalty.
Estimated tax requirements are different for farmers and fishermen.
Publication 505 provides more information
about these special estimated tax rules and about estimated tax in general.
Publications can be downloaded from this site,
or ordered by calling 1-800-829-3676.
Tax Topics & FAQs | 1999 Tax Year Archives | Tax Help Archives | Home
