Estimated Tax Series Part 3: How to Pay Estimated Taxes

June 2, 2015

This is part three of a series about estimated taxes. Part One discusses estimated tax and who needs to pay them, and Part Two discusses how to figure the amount of estimated tax you need to pay.

How do you pay?

There are a few options available to make estimated tax payments.

Online – You can make payments using ePay, the department’s electronic payment service. Click on the Estimated Tax link and instructions will guide you through paying with a check ($1 processing fee) or credit card ($1 plus 2 percent processing fee.)

Form ES-40 – You also can download Form ES-40 and submit it by mail to the department, along with the appropriate payment. After your payment is processed, preprinted vouchers for any remaining installment payments will be mailed to you.

Installment carryover – Overpayments (refunds) from the current-year tax return can be applied to the next year’s estimated tax by completing the back of the Form IT-40 or Form IT-40PNR. Once the carryover has been processed, you will be sent vouchers for the remaining installments.

IMPORTANT. Your estimated tax payment will be credited to the period in which it is paid. For instance, a payment made on May 1 will be considered a second-period installment payment as it was made between April 16 and June 15.

For more information about the penalty for underpayment of estimated tax, see Form IT-2210 (or Form IT-2210A if your income is received unevenly during the year).

Finally, making estimated tax payments throughout the year acts to reduce (or eliminate) the balance due when you file your tax return. It sure beats having to come up with the entire amount due when you file.

Earlier this year, some taxpayers may have received two sets of vouchers due to a glitch in the department’s system. Vouchers with incorrect dates should be destroyed and the corrected vouchers should be used. If you did receive incorrect vouchers and have questions, do not hesitate to call us at 317-232-2240.