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Taxmap/pubs/p505-013.htm#TXMP2a28a139 When To Pay   Estimated Tax

Estimated Tax

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return. The following chart gives the payment periods and due dates for estimated tax payments.

Table 2.3

For the period:	Due date:
Jan. 1* through March 31	April 15
April 1 through May 31	June 15
June 1 through August 31	September 15
Sept. 1 through Dec. 31	Jan. 15 next
	year**
*If your tax year does not begin on January 1, see Fiscal year taxpayers, later.
**See January payment, later.

Taxmap/pubs/p505-013.htm#TXMP2ebb7372 Saturday, Sunday, holiday rule.

If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next business day. For example, a payment due Sunday, January 15, 2006, will be on time if you make it by Tuesday, January 17, 2006.

Taxmap/pubs/p505-013.htm#TXMP088632cd January payment.

If you file your 2005 Form 1040 or Form 1040A by January 31, 2006, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2006.

A payment for the fourth payment period that is made by January 17, 2006, is considered made on January 15, 2006.

Taxmap/pubs/p505-013.htm#TXMP04643be7
Example 2.6.

Janet Adams does not pay any estimated tax for 2005. She files her 2005 income tax return and pays the balance due as shown on her return on January 24, 2006.

Janet's estimated tax for the fourth payment period is considered to have been paid on time. However, she may owe a penalty for not making the first three estimated tax payments. Any penalty for not making those payments will be figured up to January 24, 2006.

Taxmap/pubs/p505-013.htm#TXMP2e5cc593 Fiscal year taxpayers.

If your tax year does not start on January 1, your payment due dates are:

1. The 15th day of the 4th month of your fiscal year,
2. The 15th day of the 6th month of your fiscal year,
3. The 15th day of the 9th month of your fiscal year, and
4. The 15th day of the 1st month after the end of your fiscal year.

You do not have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return.

Taxmap/pubs/p505-013.htm#TXMP38474dfe When To Start

You do not have to make estimated tax payments until you have income on which you will owe the tax. If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. You can pay all your estimated tax at that time, or you can pay it in installments. If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining installment payments by the due dates for the later periods.

Taxmap/pubs/p505-013.htm#TXMP5772f570 No income subject to estimated tax during first period.

If you do not have income subject to estimated tax until a later payment period, you can make your first payment by the due date for that period. You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. The following chart shows the dates for making installment payments.

Table 2.4

If you first have income on which you must pay estimated tax:	Make a payment by:	Make later in- stallments by:
Before April 1	April 15	June 15
		September 15
		January 15
		next year*
After March 31	June 15	September 15
and before		January 15
June 1		next year*
After May 31	September 15	January 15
and before		next year*
Sept. 1
After August 31	January 15	(None)
	next year*
*See January payment and Saturday, Sunday, holiday rule under When To Pay Estimated Tax, earlier.

Taxmap/pubs/p505-013.htm#TXMP5ccc1cfd How much to pay to avoid penalty.

To determine how much you should pay by each payment due date, see How To Figure Each Payment, later.

Taxmap/pubs/p505-013.htm#TXMP0753f23b Farmers and Fishermen

Farmers and Fishermen

If at least two-thirds of your gross income for 2004 or 2005 is from farming or fishing, you have only one payment due date for your 2005 estimated tax, January 15, 2006. The due dates for the first three payment periods, discussed earlier under When To Pay Estimated Tax, do not apply to you.

A payment made by January 17, 2006, is considered made on January 15, 2006.

If you file your 2005 Form 1040 by March 1, 2006, and pay all the tax you owe, you do not need to pay estimated tax.

Taxmap/pubs/p505-013.htm#TXMP252bb9f1 Fiscal year farmers and fishermen.

If you are a farmer or fisherman, but your tax year does not start on January 1, you can either:

• Pay all your estimated tax by the 15th day after the end of your tax year, or
• File your return and pay all the tax you owe by the 1st day of the 3rd month after the end of your tax year.

Taxmap/pubs/p505-013.htm#TXMP0a39cf2c Joint returns.

On a joint return, you must add your spouse's gross income to your gross income to determine if at least two-thirds of your total gross income is from farming or fishing.

Taxmap/pubs/p505-013.htm#TXMP31365266 Gross income.

Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. To determine whether two-thirds of your gross income for 2004 was from farming or fishing, use as your gross income the total of the income (not loss) amounts.

Taxmap/pubs/p505-013.htm#TXMP10f49069 Gross income from farming.

This is income from cultivating the soil or raising agricultural commodities. It includes the following amounts.

• Income from operating a stock, dairy, poultry, bee, fruit, or truck farm.
• Income from a plantation, ranch, nursery, range, orchard, or oyster bed.
• Crop shares for the use of your land.
• Gains from sales of draft, breeding, dairy, or sporting livestock.

For 2004, gross income from farming is the total of the amounts from:

• Schedule F (Form 1040), Profit or Loss From Farming, line 11,
• Form 4835, Farm Rental Income and Expenses, line 7,
• Your share of a partnership's or S corporation's gross income from farming,
• Your share of distributable net income from farming of an estate or trust,
• Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property.

Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming.

Taxmap/pubs/p505-013.htm#TXMP20a782db Gross income from fishing.

This is income from catching, taking, harvesting, cultivating, or farming any kind of fish, shellfish (for example, clams and mussels), crustaceans (for example, lobsters, crabs, and shrimp), sponges, seaweeds, or other aquatic forms of animal and vegetable life.

Gross income from fishing includes the following amounts.

• Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing.
• Your share of a partnership's or S corporation's gross income from fishing.
• Income for services normally performed in connection with fishing.

Services normally performed in connection with fishing include:

• Shore service as an officer or crew member of a vessel engaged in fishing, and
• Services that are necessary for the immediate preservation of the catch, such as cleaning, icing, and packing the catch.

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