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Taxmap/pubs/p505-015.htm#TXMP7c1196e0 How To Pay   Estimated Tax

Estimated Tax

There are five ways to pay estimated tax.

• By crediting an overpayment on your 2004 return to your 2005 estimated tax.
• By sending in your payment with a payment voucher from Form 1040-ES.
• By paying electronically using the Electronic Federal Tax Payment System (EFTPS).
• By electronic funds withdrawal if you are filing Form 1040 or Form 1040A electronically.
• By credit card using a pay-by-phone system or the Internet.

In addition, if you are a beneficiary of an estate or trust, and the trustee elects to credit 2005 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2006.

Taxmap/pubs/p505-015.htm#TXMP7ec17d9d Crediting an Overpayment

When you file your Form 1040 or Form 1040A for 2004 and you have an overpayment of tax, you can apply part or all of it to your estimated tax for 2005. On line 73 of Form 1040, or line 46 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. The amount you have credited should be taken into account when figuring your estimated tax payments.

The credit will be applied to your payments in the order necessary to avoid the penalty for underpayment of estimated tax. You cannot have any of that amount refunded to you until the close of that tax year. You also cannot use that overpayment in any other way.

Taxmap/pubs/p505-015.htm#TXMP6518e997
Example 2.8.

When Kathleen finished filling out her 2004 tax return, she saw that she had overpaid her taxes by $750. Kathleen knew she would owe additional tax in 2005. She credited $600 of the overpayment to her 2005 estimated tax and had the remaining $150 refunded to her.

In September, she amended her 2004 return by filing Form 1040X, Amended U.S. Individual Income Tax Return. It turned out that she owed $250 more in tax than she had thought. This reduced her 2004 overpayment from $750 to $500. Because the $750 had already been applied to her 2005 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. Kathleen could not use any of the $600 she had credited to her 2005 estimated tax to pay this bill.

Taxmap/pubs/p505-015.htm#TXMP14cffb69 Using the   Payment Vouchers

Using the Payment Vouchers

Each payment of estimated tax must be accompanied by a payment voucher from Form 1040-ES. If you made estimated tax payments last year, you should receive a copy of the 2005 Form 1040-ES in the mail. It will have payment vouchers preprinted with your name, address, and social security number. Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs.

If you previously made one or more payments electronically, you will receive Form 1040-ES (E), which does not include payment vouchers. Instead please continue to make your payments electronically. This helps ensure that your account is properly and timely credited.

If you did not pay estimated tax last year, you will have to get a copy of Form 1040-ES from the IRS. See chapter 5. After you make your first payment, a Form 1040-ES package with the preprinted vouchers will be mailed to you. Follow the instructions in the package to make sure you use the vouchers correctly.

Use the window envelopes that came with your Form 1040-ES package. If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live.

Do not use the address shown in the Form 1040 or Form 1040A instructions.

If you file a joint return and you are making joint estimated tax payments, please enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return.

Taxmap/pubs/p505-015.htm#TXMP1453ef1d Change of address.

You must notify the IRS if you are making estimated tax payments and you changed your address during the year. You must send a clear and concise written statement to the IRS Center where you filed your last return and provide all of the following:

• Your full name (and your spouse's full name),
• Your signature (and spouse's signature),
• Your old address (and spouse's old address if different),
• Your new address, and
• Your social security number (and spouse's social security number).

You can use Form 8822, Change of Address, for this purpose.

You can continue to use your old preprinted payment vouchers until the IRS sends you new ones. However, do not correct the address on the old voucher.

Taxmap/pubs/p505-015.htm#TXMP314be9a7 Electronic Federal Tax Payment System (EFTPS)

EFTPS

EFTPS is a free tax payment system that all individuals and businesses can use. You can make payments online or by phone.

Here are just a few of the benefits of this easy-to-use system.

• Convenient and flexible. It is available 24 hours a day, 7 days a week, and you can use it to schedule payments in advance. For example, you can schedule estimated tax payments weekly, monthly, or quarterly.
• Fast and accurate. You can make a tax payment in minutes. Because there are verification steps along the way, you can check and review your information before sending it.
• Safe and secure. It offers the highest available levels of security. Every transaction receives an immediate confirmation.

For more information or details on enrolling, visit www.EFTPS.gov or call EFTPS Customer Service at 1-800-555-4477. Call 1-800-945-8900 if you are a TTY/TDD user. Call 1-800-945-8600 for Spanish.

Taxmap/pubs/p505-015.htm#TXMP6ccdd4ad Payment by Electronic Funds Withdrawal

Payment by Electronic Funds Withdrawal or Credit Card

You can make a 2005 estimated tax payment when you electronically file your 2004 Form 1040 or Form 1040A by authorizing an electronic funds withdrawal from your checking or savings account. Whether or not you have a balance due on your electronically filed tax return, you can schedule one estimated tax payment with an effective date of April 15, 2005, June 15, 2005, or September 15, 2005. Do not send in a Form 1040-ES payment voucher when you schedule an estimated tax payment by electronic funds withdrawal.

Taxmap/pubs/p505-015.htm#TXMP41fb278a Payment by Credit Card

Payment by Credit Card

You can use your American Express®, Discover®, MasterCard®, or Visa® credit card to make estimated tax payments. Call or access by Internet one of the service providers listed below and follow the instructions of the provider. Each provider will charge a convenience fee based on the amount you are paying. You can find out what the fee will be by calling the provider's toll-free automated customer service number or visiting the provider's web site shown below.

 
Official Payments Corporation  
1-800-2PAY-TAX (1-800-272-9829)  
1-877-754-4413 (Customer Service)  
www.officialpayments.com



 
Link2Gov Corporation  
1-888-PAY-1040 (1-888-729-1040)  
1-888-658-5465 (Customer Service)  
www.PAY1040.com

See the Form 1040-ES instructions for more information.

Previous Page:  Publication 505 - Tax Withholding and Estimated Tax - How To Figure Each Payment Next Page:  Publication 505 - Tax Withholding and Estimated Tax - Illustrated Examples Use     to find additional instances of index items.