Taxpayers who earn at least two-thirds of their annual gross income from farming or fishing compute the penalty on form IA 2210F ( find forms online). The penalty is computed on form IA 2210 ( find forms online). If a taxpayer has a tax liability of $200 or more from income that is not subject to withholding, a penalty for underpayment of estimated tax may apply. The first of the last two payments will be due on September 30 of the current year, and the second and last payment will be due January 31 of the following year. Since $150 has already been paid in two payments, the remaining tax liability of $750 must be divided into two payments of $375 each. The total taxable income for the year is now $16,000, with a total tax liability of $900. On July 15 the same individual sells real estate, which results in additional taxable income of $7,500. The taxpayer pays the first quarterly installment of $75 by April 30 of the current year and the second installment of $75 by June 30. The estimated taxable income is $8,500 and the estimated income tax liability is $300. ExampleĪn individual is making joint estimated tax payments on a calendar-year basis. ![]() If income will be greater or less than initially estimated, the estimated tax payment should be adjusted. Taxpayers who derive at least two-thirds of their annual income from farming or fishing may pay their estimated taxes as described above, but they also have two other options:ġ) They may pay the entire estimated tax by January 15 following the tax year and file the tax return by April 30Ģ) They may file the income tax return and pay the tax in full on or before March 1 of the year following the tax year. Each spouse then claims the estimated payments he or she made on the income tax return. Spouses must make separate estimated payments if they file separate Iowa returns (status 4) or separately on a combined Iowa return (status 3). Taxpayers with income in addition to wages, such as interest, dividends, capital gains, rents, royalties, business income, farm income, or certain pensions. ![]()
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