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Add initials IRS Form 1040-ES

let me quickly talk to you about irs form 1040es line by line instructions let's talk about estimated tax worksheets for individuals don't go anywhere so [Music] welcome back folks to another edition of the awesome suited q a show how are you today i hope you are doing fantastic i'm doing marvelous if you ever ask me if you are doing as great as i am go grab a cup of coffee or tea or vodka let's roll in today's conversation i want to talk to you about iris form 1040es estimated tax for individuals what is it i mean as we all know income tax is a pay-as-you-go system so if you are an employee you pay federal withholding as a part of every paycheck right every two weeks or every every week or every 30 days but if you are self-employed you might have to make quarterly estimated tax payments toward the amount you expect to owe the ad rights or you might have and something called an underpayment penalty so this payment should include both your income and self-employment taxes and are reported via form 1040 yes we're going to talk about it today now who pays estimated tax not all income is set up so that taxes are deducted at the source so if you are independent contractor or freelancer for example you don't have tax deducted from your pay so earnings from interest dividends and rent taxable unemployment compensation retirement benefits and the taxable part of your social security benefits are other examples of income that is not taxed at the source so if you have such income coming in then you should pay the estimated tax very important and can you really avoid the tax now if you're wondering you can avoid quarterly tax payments the answer is yes but you got to meet specific criteria and so you don't have to pay estimated tax payments for the current year if during the prior year during the prior tax year you had no tax liability your tax year was 12 months and you were a u.s citizen or resident alien and if you have other income that includes wages you might be able to withhold enough to cover self-employment taxes or additional income taxes to avoid irs estimated tax payments nonetheless those folks in some cases you might still need to make estimated tax payments for example let's say you receive a substantial amount of taxable income not subject to withholding you know you won the lottery or you have an a gift from a relative those are important so you might make estimated tax payments for taxable income that comes from stock sales sale of house that does not qualify for the exclusion interest dividends rents lottery winnings and so on and so forth now the estimated tax payments for for the for the year are usually due april 15 june 15 september 15 and january 15th now if the if the...