Here is the source authority: [www.irs.gov] I will quote from the IRS website, "If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller."
Since my income varies throughout the year, I calculate what I seem to owe at the end of each quarter and decide if at the end of the year I will owe more than $1000. I have a pension, Social Security, regular wages, and independent contractor income, so it gets complicated.
Shopping Southeast Pennsylvania, Delaware above the canal, and southwestern NJ since 2008
Yes it is very complicated and there is no easy answer. But read the link myst has and see if you can figure out your individual situation. There are so many variables such as what your tax situation was last year, when you earned the taxable income this year, whether you have other sources of taxable income or deferred income etc.
I have had to pay penalties in the past and in my case they were not huge if paid immediately after filing your taxes but without knowing your whole situation it is hard to answer. The dates that federal est taxes are due in for 2019 taxes are April 15, June 15, Sept 15 all in 2019 and Jan 15 2020 .. You can always pay late if you did not do it on time and that will stop the accrual of interest if they decide to apply interest. I have not been charged interest in the past if I was a week or two late on the above dates but that does not mean that will not happen in the future.
If you have a job that takes out payroll taxes, you can adjust your withholding. I typically take 0 exemptions. Just with special events and temp gigs, I cover enough for the year to keep me from owing penalties.
You can get a form from Social Security and have the taxes withheld monthly from your benefits. You can choose the amount -- $20, $40, $120 -- or a percentage (I use 17%, so it covers my self-employment tax for the year).