Declaration Of Estimated Tax (Noun)
Meaning
Return required of a taxpayer whose tax withheld from income does not meet the tax liability for the year.
Classification
Nouns denoting communicative processes and contents.
Examples
- Taxpayers who receive income not subject to withholding, such as self-employment income, are required to make a declaration of estimated tax.
- The IRS requires individuals with income not subject to withholding to file a declaration of estimated tax on a quarterly basis.
- The declaration of estimated tax is used to prepay the tax liability for the year, reducing the amount owed when the annual tax return is filed.
- Failure to file a declaration of estimated tax can result in penalties and interest on the underpaid tax liability.
- Taxpayers who do not have taxes withheld from their income, such as those who are self-employed, must make a declaration of estimated tax to avoid penalties.