You will need to set up estimated tax payments for the current tax year if both of the following situations apply:
- You expect to owe at least $1,000 in a tax for the current tax year after subtracting your withholding and refundable credits.
- You expect your withholding and refundable credits to be less than the smaller of:– 90% of the tax to be shown on your current year’s tax return, or– 100% of the tax shown on your prior year’s tax return.
There are special rules for:
- Nonresident aliens
- Certain household employers
- Certain higher income tax payers
- Farmers & Fishermen