15 – Estimated Tax (U.S.) Form 1040-ES

📘 Estimated Tax (U.S.) Form 1040-ES = Advance Tax (India)

🔹 Meaning :-
Estimated tax is the method used to pay tax on income not subject to withholding (e.g., self-employment, rental, interest, dividends, capital gains).

🔹 Who Pays :
Self-employed individuals 🧾
Investors with dividends, interest, capital gains 📈
Landlords with rental income 🏠
Anyone whose W-2 withholding is not enough to cover tax liability

🔹 How Paid :
In 4 quarterly instalments using Form 1040-ES or IRS online payment.

🔹 Due Dates (for Calendar Year Taxpayers):-
April 15 → 1st quarter (Jan–Mar income)
June 15 → 2nd quarter (Apr–May income)
September 15 → 3rd quarter (Jun–Aug income)
January 15 (next year) → 4th quarter (Sep–Dec income)

🔹 Example
Sarah is a freelancer who expects to owe $4,000 in federal tax for the year. She divides it into 4 payments of $1,000 each and pays them on the due dates above.
* This way she avoids underpayment penalties.

👉 In short: Estimated tax = quarterly prepayments for income not covered by W-2 withholding.