Absolutely not. Just splits up your payments to govt, so you aren't stuck with paying major load at once.
If you are required to pay estimated taxes and fail to, you will be forced to pay a penalty.
Who Must Pay Estimated Tax
If you had a tax liability for 2008, you may have to pay estimated tax for 2009.
General Rule
You must pay estimated tax for 2009 if both of the following apply.
- You expect to owe at least $1,000 in tax for 2009 after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of;
- 90% of the tax to be shown on your 2009 tax return, or
- 100% of the tax shown on your 2008 tax return. Your 2008 tax return must cover all 12 months.
Sole proprietors, partners, and S corporation shareholders - You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. For additional information, refer to
Publication 505, Tax Withholding and Estimated Tax.
Corporations - You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Use
Form 1120-W, Estimated Tax for Corporations (PDF), to figure the estimated tax. You must deposit the payments. For additional information, refer to
Publication 542, Corporations.
Who Does Not Have To Pay Estimated Tax
If you receive salaries and wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. To do this, file a new
Form W-4 (PDF) with your employer. There is a special line on Form W-4 for you to enter the additional amount you want your employer to withhold.
Estimated tax not required
You do not have to pay estimated tax for 2009 if you
meet all three of the following conditions.
- You have no tax liability for 2008
- You were a US citizen or resident for the whole year
- Your 2008 tax year covered a 12 month period
You had no tax liability for 2008 if your total tax was zero or you did not have to file an income tax return. For additional information on how to figure your estimated tax, refer to
Publication 505, Tax Withholding and Estimated Tax.
Estimated tax requirements are different for farmers and fishermen.
Publication 505, Tax Withholding and Estimated Tax, provides more information about these special estimated tax rules.
source:
Estimated Taxes