Estimated tax payments

Tax is due as income arrives. An employer handles this with withholding. A self-employed person, a landlord or an investor has no employer to do it, so the IRS expects payments during the year instead.

These payments cover income tax and self-employment tax. Paying too little or too late can bring a penalty, even when a refund is due at filing. Owners of an S corporation or LLC often set their own wage withholding to cover this. The tax planning page covers how to size the payments and set the quarterly dates for each tax year.