Estimated tax is a method used to pay tax on income that is not subject to withholding. This income includes self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards.

Income tax is generally withheld from pensions and annuity payments you receive. However, if the tax withheld is not enough, you may have to pay estimated tax. If you do not pay enough tax through withholding, by making estimated tax payments, or both, you may be charged a penalty.

• Who Must Make Estimated Tax Payments

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