Its the smaller of last year's tax or 90% of this year's, which ever is less, _except_ for higher income people who have to pay the smaller of 90% this year's estimated or 105% of last year's actual tax. To quote from IRS publications:
General rule. You must make estimated tax payments for 1999 if you expect to
owe at least $1,000 in tax for 1999 after subtracting your withholding and credits,
and you expect your withholding and credits to be less than the smaller of:
1.90% of the tax to be shown on your 1999 tax return, or
2.100% of the tax shown on your 1998 tax return. Your 1998 tax return must
cover all 12 months.
Note. If all your 1999 income will be subject to income tax withholding, you
probably do not need to make estimated tax payments.
Exceptions. There are exceptions to the general rule for farmers, fishermen, and
certain higher income taxpayers. See Figure 5-A and chapter 2 of Publication 505
for more information.
irs.ustreas.gov
Publication 505
Tax Withholding and Estimated Tax
Single
$126,600
Married filing jointly or qualifying widow(er)
$189,950
Married filing separately
$94,975
Head of household
$158,300
...
Estimated tax safe harbor for higher income individuals. For installment
payments for tax years beginning in 1999, the estimated tax safe harbor for higher
income individuals (other than farmers and fishermen) has been modified. If your
adjusted gross income is more than $150,000 ($75,000 if married filing a separate
return), you will have to deposit the smaller of 90% of your expected tax for 1999
or 105% of the tax shown on your 1998 return to avoid an estimated tax penalty.
irs.ustreas.gov |
