Form 1040-ES: Estimated Tax for Individuals (2019)
What Form 1040-ES Is For
Form 1040-ES is the IRS tool that helps you calculate and pay estimated taxes throughout the year on income that isn't subject to automatic tax withholding. The United States operates on a "pay-as-you-go" tax system, meaning you're expected to pay taxes as you earn income rather than waiting until April to settle up. For employees, employers automatically withhold taxes from paychecks. But if you're self-employed, own a business, or earn income from sources like rental properties, investments, or contract work, you need Form 1040-ES to figure out how much to pay and when.
The form package includes detailed worksheets to calculate your expected annual tax liability, tax rate schedules to determine what you'll owe based on your filing status, and payment vouchers to submit with checks or money orders. It covers not just income tax but also self-employment tax and other taxes like the alternative minimum tax. Common users include freelancers, independent contractors, gig economy workers, sole proprietors, partners, S corporation shareholders, and anyone receiving substantial income from interest, dividends, alimony, rental properties, or capital gains. Retirees with pension or annuity income without sufficient withholding also frequently use this form.
When You’d Use Form 1040-ES
For tax year 2019, estimated tax payments follow a quarterly schedule with specific due dates: April 15, 2019, June 17, 2019, September 16, 2019, and January 15, 2020. If you mail your payment, the postmark date counts as the payment date. There's one important shortcut: if you file your complete 2019 tax return by January 31, 2020, and pay the entire balance due with that return, you don't need to make the January 15 payment.
You can start making estimated payments at any point during the year when you realize you'll owe taxes. If your first income subject to estimated tax doesn't arrive until after March 31, 2019, you should use the annualized income installment method to calculate payments, which prevents penalties for missing earlier deadlines when you had no taxable income.
Life changes constantly, and your estimated tax should change with it. If you get a big contract, sell investment property, experience a drop in income, get married or divorced, or have any significant financial change, you need to amend your estimated tax. Unlike amending a filed tax return, amending estimated tax is straightforward—you don't file a formal amendment with the IRS. Instead, you recalculate your total estimated tax for the year using Worksheet 2-10 in Publication 505, figure out what you should have paid by now, subtract what you've already paid, and adjust your remaining payments accordingly. If you need to make more than four payments, simply copy one of your blank payment vouchers, fill it in, and mail it with your payment.
Key Rules or Details for 2019
General Requirement to Pay Estimated Tax
The fundamental requirement is straightforward: you must make estimated tax payments for 2019 if both conditions apply: first, you expect to owe at least $1,000 in tax after subtracting withholding and refundable credits; and second, you expect your withholding and refundable credits to be less than the smaller of either 90% of your 2019 tax or 100% of the tax shown on your 2018 return. Your 2018 return must have covered a full 12 months for this comparison to work.
Exceptions and Safe Harbor Rules
Several important exceptions exist. You don't owe estimated tax if you had no tax liability for 2018, were a U.S. citizen or resident alien for all of 2018, and your 2018 return covered 12 months—even if you'll owe substantial tax in 2019. Higher-income taxpayers face stricter standards: if your 2018 adjusted gross income exceeded $150,000 ($75,000 if married filing separately in 2019), you must pay 110% rather than 100% of your prior year's tax to use the safe harbor rule.
Special Rules for Farmers and Fishermen
Farmers and fishermen enjoy special benefits. If at least two-thirds of your gross income for 2018 or 2019 comes from farming or fishing, you need only pay 66⅔% (rather than 90%) of your current year tax, and you can make just one payment by January 15, 2020, or file your return by March 2, 2020, and pay everything then.
Key 2019 Tax Figures
For 2019, key tax figures include: Social Security tax applies to the first $132,900 of earned income; standard deductions increased to $24,400 for married filing jointly, $18,350 for head of household, and $12,200 for single or married filing separately. Taxpayers age 65 or older or blind receive additional standard deduction amounts. The adoption credit increased to $14,080, and various other provisions changed due to tax reform.
Step-by-Step (High Level)
Step 1: Determine if you need to pay
Step 1: Determine if you need to pay. Apply the general rule: will you owe at least $1,000 after withholding and credits, and will your withholding fall short of the 90%/100% thresholds? If you have a regular job with withholding, consider simply asking your employer to withhold additional tax using Form W-4 rather than making quarterly payments—it's often more convenient.
Step 2: Calculate your estimated tax
Step 2: Calculate your estimated tax. Gather your 2018 tax return for reference, the 2019 Estimated Tax Worksheet included with Form 1040-ES, and the 2019 Tax Rate Schedules. Estimate your 2019 adjusted gross income, considering all income sources and the deduction for one-half of self-employment tax. Subtract your deductions (either itemized or the standard deduction, plus the qualified business income deduction if applicable). Apply the tax rates from the schedules to determine your regular income tax. Add self-employment tax (calculated separately using the Self-Employment Tax and Deduction Worksheet) and any other taxes. Subtract your expected credits. The result is your total estimated tax.
Step 3: Calculate quarterly payments
Step 3: Calculate quarterly payments. Divide your total estimated tax by four for equal quarterly payments. If you're recalculating after already making payments, subtract what you've paid and divide the remainder among your remaining payment periods.
Step 4: Choose your payment method
Step 4: Choose your payment method. The IRS offers multiple convenient options: IRS Direct Pay for free electronic transfers from your bank account; debit or credit card payments (with convenience fees); the Electronic Federal Tax Payment System (EFTPS) after enrollment; telephone payments; cash payments at participating retail partners; or traditional checks or money orders mailed with payment vouchers. Electronic methods provide immediate confirmation and faster posting to your account.
Step 5: Submit timely payments
Step 5: Submit timely payments. Make payments by the quarterly deadlines. Keep detailed records of payment dates, amounts, and confirmation numbers—you'll need them when filing your annual return to claim credit for these payments.
Step 6: Monitor and adjust
Step 6: Monitor and adjust. Review your situation periodically. If income or deductions change significantly, recalculate and adjust remaining payments. If you receive income unevenly, consider using the annualized income installment method, which can lower or eliminate required payments for certain quarters.
Common Mistakes and How to Avoid Them
Underestimating Total Income
Underestimating total income ranks as the most common error. Taxpayers forget about capital gains from investment sales, rental income, the taxable portion of Social Security benefits, freelance projects, or hobby income that crossed into business territory. Keep a running list of all income sources throughout the year.
Forgetting Self-Employment Tax
Forgetting self-employment tax shocks many first-time freelancers and business owners. Unlike employees whose employers pay half their Social Security and Medicare taxes, self-employed individuals pay both halves—15.3% on net earnings up to $132,900 for Social Security, plus 2.9% Medicare on all earnings, plus 0.9% additional Medicare tax on high earnings. Remember you pay self-employment tax on only 92.35% of net profit, and you deduct half when calculating adjusted gross income.
Missing Deadlines or Making Unequal Payments
Missing deadlines or making unequal payments causes unnecessary penalties. Each quarterly period stands alone—you can't skip one and catch up later without penalty. The IRS calculates penalties based on how long each underpayment remained unpaid. Set calendar reminders for all four dates when you make your first payment.
Using Wrong Mailing Addresses
Using wrong mailing addresses delays payment posting. The IRS maintains different processing centers for estimated payments versus annual returns, and addresses vary by state. Always verify the correct address for your state on the current year's form. Never use the Form 1040 instruction address for estimated payments.
Failing to Adjust for Life Changes
Failing to adjust for life changes leads to underpayment penalties. Marriage, divorce, children, home purchases, job changes, or major medical expenses significantly affect taxes. Recalculate whenever circumstances change substantially.
Joint vs. Separate Payments for Married Couples
Improper treatment of joint versus separate payments causes confusion for married couples. You can make joint estimated payments only if both spouses will file jointly, both are citizens or residents, you're not legally separated, and you have the same tax year. If you make joint payments but later file separately, you must attach a statement to your return explaining how payments should be allocated.
Health Insurance Premium Tax Credits
Forgetting health insurance premium tax credits creates surprise tax bills. If you purchase insurance through the Health Insurance Marketplace and receive advance premium tax credits, income changes during the year affect your final tax liability. Report income changes to the Marketplace promptly to avoid overpayment of credits and a large balance due.
What Happens After You File
When you make estimated payments, the IRS posts them to your tax account. You claim credit for these payments when you file your 2019 Form 1040 in 2020, which reduces your balance due or increases your refund.
If you underpaid, the IRS typically calculates any penalty automatically using Form 2210 and sends you a bill. You don't need to file Form 2210 yourself unless you're claiming a waiver, using the annualized income method, or want to calculate the penalty yourself to verify accuracy. The penalty is calculated separately for each payment period based on the underpayment amount and duration. Critically, you may owe a penalty even if your tax return shows a refund—the penalty applies if you didn't pay enough during the year, regardless of your final balance.
Penalty waivers are available under specific circumstances. The IRS can waive penalties if you failed to pay due to casualty, disaster, or other unusual circumstances making it inequitable to impose the penalty; if you retired after reaching age 62 or became disabled during 2018 or 2019 and had reasonable cause for underpayment; or if you couldn't accurately calculate payments due to tax reform changes. To request a waiver, file Form 2210 with your return and provide supporting documentation explaining your circumstances.
If you overpaid estimated taxes, you can choose to receive a refund or apply the overpayment to your 2020 estimated tax when filing your 2019 return. Many taxpayers who expect to make estimated payments again find applying the credit forward more convenient.
FAQs
Can I avoid making estimated tax payments if I'm self-employed but also have a job with withholding?
Yes, absolutely. Increase your withholding at your regular job by filing a new Form W-4 with your employer. The IRS doesn't distinguish between tax withheld and estimated payments—as long as the total meets requirements, you won't face penalties. This approach is often simpler than managing quarterly payments. Use the Tax Withholding Estimator at IRS.gov to calculate how much additional withholding you need.
What if I realize late in the year that I should have been making estimated payments all along?
Calculate your total estimated tax immediately and pay as much as possible by the next deadline. You'll likely face penalties for earlier periods, but you can minimize additional penalties by catching up quickly. Consider whether you qualify for penalty waivers, particularly if tax law changes made calculations difficult. Also consider increasing withholding from wages, pensions, or annuities, since withholding is treated as paid evenly throughout the year even if increased late.
Do I have to make all four payments, or can I pay the full amount early?
You can pay your entire estimated tax by April 15, 2019, if you prefer. You can also make more than four payments throughout the year. However, paying everything early doesn't protect you if you later underestimate your total tax—you'll still owe penalties for later quarters if your total payments fall short of requirements.
My income varies greatly from month to month. Do I have to pay equal quarterly amounts?
No. Use the annualized income installment method to match payments more closely to when you actually earn income. This is particularly valuable if you receive most income late in the year—you might owe little or nothing for early quarters. This method requires completing Form 2210 Schedule AI with your tax return, but it can significantly reduce or eliminate penalties. See Chapter 2 of Publication 505 for detailed instructions.
If I changed my name due to marriage, how do I make sure my payments are credited correctly?
Report your name change to Social Security immediately by visiting an office or calling 800-772-1213. When filing your 2019 return, attach a statement listing all estimated tax payments made during the year, showing the names and Social Security numbers under which payments were made. If filing jointly, list payments made by each spouse separately. This ensures proper crediting.
Are estimated tax payments different for farmers and fishermen?
Yes, significantly different. If at least two-thirds of your gross income for 2018 or 2019 comes from farming or fishing, you need pay only 66⅔% (instead of 90%) of your current year tax. You can make just one payment by January 15, 2020, instead of four quarterly payments. Alternatively, skip estimated payments entirely if you file your 2019 return and pay the full balance by March 2, 2020. These rules recognize the seasonal nature of agricultural income.
What if I'm a fiscal year taxpayer instead of a calendar year taxpayer?
Your payment due dates are the 15th day of the 4th, 6th, and 9th months of your current fiscal year, plus the 1st month of your following fiscal year. The same rules apply, just adjusted to your fiscal year schedule. If any date falls on a Saturday, Sunday, or legal holiday, use the next business day. See Publication 509 for a complete holiday list.
For complete instructions and worksheets, visit IRS.gov/Form1040ES or download the 2019 Form 1040-ES package. For detailed guidance, consult Publication 505, Tax Withholding and Estimated Tax.
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