Page 29 - Tax withholding and Estimated Taxes

12:15 - 17-Jun-2020
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Fileid: … tions/P505/2020/A/XML/Cycle03/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
If you file your 2020 Form 1040 or 1040-SR for each period by dividing your annual estima- Amended estimated tax. If you refig-
by March 1, 2021, and pay all the tax you owe ted tax due (line 14a of the 2020 Estimated Tax ure your estimated tax during the year,
at that time, you don’t need to make an estima- Worksheet (Worksheet 2-1)) by 4. Enter this or if your first estimated tax payment is
ted tax payment. amount on line 15. However, use this method due after April 15, 2020, figure your required
only if your income is basically the same payment for each remaining payment period us-
Fiscal year farmers and fishermen. If you throughout the year. ing Worksheet 2-10.
are a farmer or fisherman, but your tax year
does not start on January 1, you can either: Even though some estimated tax pay- Example. Early in 2020, Mira Roberts fig-
ment due dates have been postponed
• Pay all your estimated tax by the 15th day TIP ures that her estimated tax due is $1,800. She
after the end of your tax year, or or changed for 2020, you may still want makes estimated tax payments on April 15 and
• File your return and pay all the tax you owe to use the regular due dates to figure each re- June 15 of $450 each ($1,800 ÷ 4).
by the 1st day of the 3rd month after the quired payment for each period. On July 10, she sells investment property at
end of your tax year. a gain. Her refigured estimated tax is $4,100.
Change in estimated tax. After you make an Her required estimated tax payment for the third
How To Figure estimated tax payment, changes in your in- payment period is $2,175, as shown in her fil-
come, adjustments, deductions, or credits may
led-in Worksheet 2-10.
Each Payment make it necessary for you to refigure your esti- If Mira's estimated tax does not change
mated tax. Pay the unpaid balance of your
amended estimated tax by the next payment again, her required estimated tax payment for
the fourth payment period will be $1,025.
After you have figured your total estimated tax, due date after the change or in installments by
figure how much you must pay by the due date that date and the due dates for the remaining Underpayment penalty. The penalty is fig-
of each payment period. You should pay payment periods. ured separately for each payment period. If you
enough by each due date to avoid a penalty for figure your payments using the regular install-
that period. If you don’t pay enough during any If you don’t receive your income evenly ment method and later refigure your payments
payment period, you may be charged a penalty throughout the year, your required estimated because of an increase in income, you may be
even if you are due a refund when you file your tax payments may not be the same for each pe- charged a penalty for underpayment of estima-
tax return. The penalty is discussed in the In- riod. See Annualized Income Installment ted tax for the period(s) before you changed
structions for Form 2210. Method, later. your payments. To see how you may be able to
avoid or reduce this penalty, see Sched-
Regular Installment Method ule AI—Annualized Income Installment Method
in the Instructions for Form 2210.
If your first estimated tax payment is due April
15, 2020, you can figure your required payment

Chapter 2 Estimated Tax for 2020 Page 27