What is the difference between federal and state estimated taxes?

Modified on Wed, 24 Jan 2024 at 12:33 PM

Federal estimated taxes are payments sent to the IRS to help lower your tax bill. The IRS rule is that taxpayers must generally pay at least 90 percent of their taxes throughout the year through withholding, estimated tax payments or a combination of the two. If they don’t, they may owe an estimated tax penalty.

 

State estimated taxes are payments sent to your state agency to help lower your tax bill. Sending payments to the IRS will not satisfy the potential need for state estimated payments. The requirement for estimated tax payments varies state by state, so you’ll need to check with your state to see their specific requirements.

 

Additional Resources:

This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.

 

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