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IRS FORMS: 1040-ES

Do I Need to File Form 1040-ES to Pay My Estimated Taxes?

Jo Willetts, EA Director, Tax Resources Published On February 09, 2021

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Form 1040-ES is used to calculate and pay your quarterly estimated tax payments. This form can be manually completed and filed quarterly during the year. Form 1040-ES can be generated by tax software.

Once your estimated tax payment has been calculated, the current payment voucher must be sent to the correct IRS address based on the state where you live. The 1040-ES worksheet does not need to be sent to the IRS, instead it should be kept with your tax records for the year.

Am I required to make quarterly estimated tax payments?

You may need to make estimated tax payments if you receive taxable income that is not mandated to have federal income tax withheld, like salaries and wages, or voluntarily withheld like unemployment and retirement benefits. In most cases, you are required to make estimated tax payments if you expect to owe at least $1,000 when you file your taxes on Tax Day, April 15.

Self-employment income is the most common type of income requiring payment of quarterly estimated taxes. Self-employed individuals are responsible for income tax payments as well as their SE taxes, which are the equivalent of the Medicare and Social Security taxes paid by an employer and through withholdings. SE taxes are calculated using Schedule SE and reported on Form 1040 as part of the additional taxes on your tax return.

However, significant amounts of the following types of income could also require you to make estimated tax payments:

  • Investment income, such as interest and capital gains from stock sales
  • Rental income
  • Certain legal settlements
  • Gambling winnings
  • Prizes
  • Selling a business

While investment and rental income may be more likely to occur regularly, single large transactions such as winning a prize could also require an equally large one-time estimated tax payment.

When do I need to file Form 1040-ES?

Quarterly tax payments are due on the following days:

  • April 15 of the current year for January-March estimated earnings
  • June 15 for April-June estimated earnings
  • September 15 for July-September estimated earnings
  • January 15 of the following tax year for October-December earnings, although this payment requirement is waived if you file your federal tax return by February 1 and pay the entire balance due

Taxpayers were granted an extension of estimated tax deadline for the second quarter of 2020 given the COVID-19 situation without risking underpayment penalties, however, this relief has not been extended to future estimated tax payments at the time of this writing.

Is Form 1040-ES required if I’m making my tax payments online?

You do not need to file Form 1040-ES if you opt to make estimated tax payments online. 

You may do so at any time through IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS). Creating an EFTPS account takes longer since it requires verification by mail, but offers a full suite of personal, business, and estate tax payment options. IRS Direct Pay is limited to personal income tax payments but offers a more expedited route to pay timely and accurate estimated tax payments since it does not require account creation.

Additionally, you can pay by the month or transaction by making online payments. While investment and rental income may be more likely to occur regularly, single large transactions such as winning the lottery may require an equally large single estimated tax payment.

Multiple payments made before the quarterly deadline are considered “one” sum for the quarter in question. For example, if you paid $1,000 per month in estimated taxes based on your January and February income and you received a sizable taxable legal settlement in March for which you paid $5,000 that month, your first quarter prepaid taxes would be considered one sum of $7,000 since all of the amounts were paid prior to April 15.

If you have income not subject to withholding, you are required to make estimated tax payments regardless of whether you pay online or file Form 1040-ES.

About the Author

Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.

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