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Step 1
Review the amount of your tax liability. The government sets a general guideline for paying estimated taxes for individuals who receive more than 10 percent of their taxable income from sources that do not withhold taxes.
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Step 2
Consider the amount of investment income you expect to receive in any year when determining the need to file form 1040-ES. For example, if you sold an investment property or you made a large profit in the stock market, you may be required to pay estimated taxes quarterly.
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Step 3
Counter the need to pay quarterly if you deposit money in a tax-deferred investment. Although you would normally pay quarterly and file form 1040-ES if you received a large capital gain, by rolling it into a Roth IRA or into a 1031 tax-exchange investment, your tax liability can drop below the required rate. In such cases, contact a tax attorney for the best advice.
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Step 4
Choose to reduce your need to file form 1040-ES by increasing your withholding rate from another source of income. If one spouse is self-employed and the other is an employee, the employee can withhold at a higher rate in order to keep the other spouse from paying estimated quarterly taxes.
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Step 5
Check the current federal tax laws. Because tax regulations change, often yearly, your situation may require you to pay quarterly this year even if you did not do so last year. (See Resources)
