How to Calculate Estimated Taxes
Most people who are employees don't have to worry about estimated taxes because they have taxes withheld from their paychecks. If you're not an employee, however, then there's no one withholding taxes from your paycheck for you. And if you'll owe more than $1,000 in federal taxes at the end of the year -- which, if you're not subject to withholding, is pretty likely -- the IRS requires you to make estimated tax payments four times a year rather than waiting until April 15 to pay it all.
When you work for an employer who withholds taxes for you, the IRS knows that it's going to get most if not all of its tax money during the course of the year. But if you don't have withholding on your income, the agency fears that you might spend all your money and not have enough to pay them come tax time. So the IRS insists that instead of waiting until you file your tax return to pay all your taxes, you must make quarterly payments in advance.
Estimated payments are typically due on April 15, June 15, and September 15 of the tax year, and the final payment is made on January 15 of the following year. If any of these days falls on a holiday or weekend, you have until the following workday to make your payment.
Source: Fool.com
