Estimated tax payments

Payments made during the year on income that has no withholding, such as self-employment profit, usually in four installments. The underpayment penalty is generally avoided when withholding and payments reach the smaller of 90% of this year's tax and 100% of last year's tax, or 110% of last year's tax for higher incomes. Extra withholding from a job counts as paid evenly through the year.