So, how do you figure your estimated tax? The first step is to determine the amount of income you will receive during the year that doesn't have state tax withheld on it. Now, that can be challenging. For example, you may have just started a business or retired this year, or made costly improvements to your company, and you're not sure how they will affect your bottom line. Here's an example of how to calculate your income for the year. Let's say you get a periodic payment, such as a $2,500 monthly pension check or other regular distribution. Since you'll get a check every month, simply multiply the amount of one check by twelve. This will give you the amount of pension income you'll receive for the year. After you've figured out your income, you'll need to go to our website to find the county tax rate for the Indiana County where you lived on January 1st. Let's say your county tax rate is 1 percent. Add your county tax rate to the state income tax rate. Next, multiply your annual pension by the combined tax rates. The result is how much estimated tax you can expect to owe for the year. Once you've figured out what you expect to owe, you're ready to make your payment. You only have to make four estimated tax payments during the year, so simply divide the amount you owe by four. Then, make your first payment on the 15th of April. The next payments will be due on the 15th of September and January of the following year.
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1040 es Form: What You Should Know
For the Tax Year Ending Jan 24, 2024 — Use IRS Form 1040-ES to figure and pay your estimated tax for 2022. Estimated tax is the method used to pay tax on income.
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