If you have extra income outside of your W-2 paycheck in 2010, this is a reminder that the deadline for 4th Quarter 2010 estimated tax payments is Tuesday, January 18th, 2011. (Updated: January 15th falls on a Saturday, and the 17th is a federal holiday.) Estimated tax payments help you make sure Uncle Sam gets his share of income that doesn’t automatically withhold taxes. This is the last chance for 2010, otherwise you may be hit with taxes and penalties by the time you file your tax return.
According to IRS.gov, generally you must pay estimated tax for 2010 if both of the following apply:
- You expect to owe at least $1,000 in tax for 2010 after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of;
- 90% of the tax to be shown on your 2010 tax return, or
- 100% of the tax shown on your 2009 tax return. Your 2009 tax return must cover all 12 months.
Need help estimating how much tax you’ll owe? Try the new TaxCaster widget from TurboTax. It’s free and designed to estimate your refund, but that also means it estimates your potential tax bill as well. Since an estimate is all you’re looking for, I found the tool quite handy. Be sure to enter all your extra income in the Total Income section: