What are estimated payments and do I need to make them?

You are required to make quarterly estimated tax payments, if you can reasonably expect your tax liability to exceed the amount withheld by $500.00 or more and you expect your withholding to be less than the smaller of 70% of your current year's liability or the tax liability shown on your return for the preceding taxable year of twelve months. Taxpayers who fail to pay estimated tax payments may be subject to interest on the amount underpaid. Forms OW-8-ES, for filing estimated tax payments, are available for downloading from the income tax forms page of our web site.

If at least 66 2/3% of your gross income for this year or last year is from farming, estimated tax payments are not required.

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