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Estimated tax payments are periodic (usually quarterly) payments made by self-employed individuals or business owners to cover their expected tax liability for the year. They're typically required when you expect to owe tax of $1,000 or more when your return is filed.
Making estimated tax payments helps to spread out tax liabilities over the year, rather than having to pay all your taxes at once at the year's end. It's essential to calculate these payments as accurately as possible, as underpayment can result in penalties.
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