How To Pay 
Estimated Tax(p26)

There are five ways to pay estimated tax.

• Credit an overpayment on your 2010 return to your 2011 estimated tax.
• Send in your payment (check or money order) with a payment voucher from Form 1040-ES.
• Pay electronically using the Electronic Federal Tax Payment System (EFTPS).
• Pay by electronic funds withdrawal (EFW) if you are filing Form 1040 electronically.
• Pay by credit or debit card using a pay-by-phone system or the Internet.

If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2010, you can apply part or all of it to your estimated tax for 2011. On line 75 of Form 1040, or line 47 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Take the amount you have credited into account when figuring your estimated tax payments. If you timely file your 2010 return, treat the credit as a payment made on April 15, 2011.

If you are a beneficiary of an estate or trust, and the trustee elects to credit 2011 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2012.

If you choose to have an overpayment of tax credited to your estimated tax, you cannot have any of that amount refunded to you until you file your tax return for the following year. You also cannot use that overpayment in any other way.

When Kathleen finished filling out her 2010 tax return, she saw that she had overpaid her taxes by $750. Kathleen knew she would owe additional tax in 2011. She credited $600 of the overpayment to her 2011 estimated tax and had the remaining $150 refunded to her.

In September, she amended her 2010 return by filing Form 1040X, Amended U.S. Individual Income Tax Return. It turned out that she owed $250 more in tax than she had thought. This reduced her 2010 overpayment from $750 to $500. Because the $750 had already been applied to her 2011 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. Kathleen could not use any of the $600 she had credited to her 2011 estimated tax to pay this bill.

Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. If you made estimated tax payments last year and did not use a paid preparer to file your return, you should receive a copy of the 2011 Form 1040-ES in the mail. It will have payment vouchers preprinted with your name, address, and social security number. Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs.

Use the window envelopes that came with your Form 1040-ES package. If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live.

If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). Follow the instructions in the package to make sure you use the vouchers correctly.

If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return.

You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Send a clear and concise written statement to the Internal Revenue Service Center where you filed your last return and provide all of the following information.

• Your full name (and your spouse's full name).
• Your signature (and spouse's signature).
• Your old address (and spouse's old address if different).
• Your new address.
• Your social security number (and spouse's social security number).

You can use Form 8822, Change of Address, for this purpose.

For information on paying your estimated taxes electronically, including by credit or debit card, go to www.irs.gov/e-pay.