Sunday, April 6, 2008

Who Must Pay Estimated Tax

If you owed additional tax for 2006, you may have to pay estimated tax for 2007.As a general rule, you must pay estimated tax for 2007 if both of the following apply:



1. You expect to owe at least $1000 in tax for 2007, after subtracting your withholding and credits.



2. You expect your withholding ans credits to be less than the smaller of:


a.90% of the tax to be shown on your 2007 tax return, or


b. 100% of the tax shown on your 2006 tax return. Your 2006 tax return must cover all 12 months.



Aliens-
Resident and non resident aliens also may have to pay estimated tax. Resident aliens should follow the rules in this publication, unless noted otherwise. Nonresident aliens should get Form 1040-ES. You are an alien if you are not a citizen of the United States. You are an alien if you are not a citizen or national of the United States. You are a resident alien if you either have a green card or meet the substantial presence test.

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