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1040-ES Form

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A Form 1040-ES is a tax document used by freelancers or independent contractors to estimate the federal tax they will owe on their income. This document is prepared by the freelancer or independent contractor and not by the business working with them. Taxes that may be estimated with this form include income tax, self-employment tax, and other taxes. This document is generally prepared by the freelancer or independent contractor on a quarterly basis.

1040-ES Form

Related Documents

1040-A › Form 1040-EZ › 1098-E ›

What is a 1040-ES?

A 1040-ES Form is used for tax filing purposes. The form will allow filers to calculate the estimated amount of tax liability they owe for the year. Freelancers and independent contractors may need to file Form 1040-ES, as they do not have taxes withheld automatically.

If you do not set up voluntary withholding, this form will be needed to ensure you pay the correct amount of taxes. This will include fees for federal taxes, state taxes, and social security. Estimated tax payments may not always be enough, so it is possible that you may owe more taxes after filing for the year. It is also possible for you to get a refund.

In order to estimate the amount of taxes you owe, you will need to know the gross amount of all your taxable income. If you are unsure about your yearly income, you can use last year's tax return as a basis if the work was similar.

Most Common Uses

A Form 1040-ES is used to estimate your taxes for the current fiscal year.  You use this form to pay income tax, self-employment tax, and any other tax you may be liable for.

This form is used to pay estimated tax on income where tax is not deducted at the source.  This form is commonly used by independent contractors and freelancers and to calculate taxes from interest, dividends and rent, taxable unemployment compensation, retirement benefits, and the taxable part of your Social Security benefits.

The estimated tax rules apply to U.S. citizens and resident aliens, residents of Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa, and nonresident alien.

Components of a 1040-ES

The 1040-ES form contains the following sections:

  • Instructions
  • Self-Employment Tax and Deduction Worksheet
  • Tax Rate Schedules
  • Estimated Tax Worksheet
  • Record of Estimated Tax Payments
  • Payment Voucher

How to Complete a 1040-ES (Step by Step)

Read the instructions

Fill out Self-Employment Tax and Deduction Worksheet

  1. Expected income and profits
    1. Enter your expected income and profits subject to self-employment tax
    2. If you will have farm income and also receive social security retirement or disability benefits, enter your expected Conservation Reserve Program payments that will be included on Schedule F (Form 1040) or listed on Schedule K-1 (Form 1065)
  2. Subtract line 1b from line 1a
  3. Multiply line 2 by 92.35% (0.9235)
  4. Multiply line 3 by 2.9% (0.029)
  5. Social security tax maximum income $160,200
  6. Enter your expected wages (if subject to social security tax or the 6.2% portion of tier 1 railroad retirement tax)
  7. Subtract line 6 from line 5 (Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.)
  8. Enter the smaller of line 3 or line 7
  9. Multiply line 8 by 12.4% (0.124)
  10. Add lines 4 and 9. Enter the result here and on line 9 of your Estimated Tax Worksheet
  11. Multiply line 10 by 50% (0.50). This is your expected deduction for self-employment tax on Form 1040, line 14. Subtract this amount when figuring your expected AGI on line 1 of your Estimated Tax Worksheet

Fill out your Estimated Tax Worksheet

  1. Adjusted gross income you expect in current tax year
  2. Deductions
    • 2a If you plan to itemize deductions, enter the estimated total of your itemized deductions
    • 2a If you don't plan to itemize deductions, enter your standard deduction. 
    • 2b If you can take the qualified business income deduction, enter the estimated amount of the deduction
    • 2c Add lines 2a and 2b
  3. Subtract line 2c from line 1
  4. Tax. Figure your tax on the amount on line 3 by using the Tax Rate Schedules.
  5. Alternative minimum tax from Form 6251 
  6. Add lines 4 and 5. Add to this amount any other taxes you expect to include in the total on Form 1040, line 16
  7. Credits. Do not include any income tax withholding on this line
  8. Subtract line 7 from line 6. If zero or less, enter -0-
  9. Self-employment tax
  10. Other taxes
  11. (a) Add lines 8 through 10; (b) Earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, refundable American opportunity credit, and section 1341 credit; (c) Total estimated tax. Subtract line 11b from line 11a. If zero or less, enter -0-
  12. (a) Multiply line 11c by 90% (66 2/3% for farmers and fishermen); (b) Required annual payment based on prior year's tax; (c) Required annual payment to pay by due date to avoid a penalty. Enter the smaller of line 12a or 12b
  13. Income tax withheld and estimated to be withheld during current year (including income tax withholding on pensions, annuities, certain deferred income, etc.)
  14. (a) Subtract line 13 from line 12c. If the result zero or less, you are not required to make estimated tax payments. If more than zero, go to line 14b; (b) Subtract line 13 from line 11c. If the result less than $1,000, you are not required to make estimated tax payments.  If the result is $1,000 or more, go to line 15 to figure your required payment.
  15. If the first payment you are required to make is due by the specified date, enter ¼ of line 14a (minus any past year’s overpayment that you are applying to this installment) here, and on your estimated tax payment voucher(s) if you are paying by check or money order

Record of Estimated Tax Payments

For each payment, record:

  1. Amount due
  2. Date paid
  3. Check or money order number, or credit or debit card confirmation number
  4. Amount paid (do not include any convenience fee)
  5. Overpayment credit applied
  6. Total amount paid and credited (add (4) and (5))

Payment Voucher

If you are making a payment of estimated tax by check or money order, complete and mail the tax voucher with your check or money order payable to “United States Treasury.” Write your social security number and “[Current Year] Form 1040-ES” on your check or money order. Do not send cash. Enclose, but do not staple or attach, your payment with this voucher.  

You can pay by credit card if you go directly to IRS.gov/Payments

To use EFTPS, you must be enrolled online or have an enrollment form mailed to you.  For more information about EFTPS, go to IRS.gov/Payments or www.EFTPS.gov

External Resources

  • https://www.irs.gov/pub/irs-pdf/f1040es.pdf
  • https://www.irs.gov/forms-pubs/about-form-1040-es
  • https://www.irs.gov/pub/irs-pdf/f1040esn.pdf

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1040-ES

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1040-A

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1040-EZ

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1098-E

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Sample 1040-ES Form

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Sample 1040-ES Form

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