Figuring out estimated payments may seem a bit confusing. But I have a simple approach – that is, assuming your tax obligation will be the same or higher compared to last year’s.

Here’s how to do it:

  • Get a copy of last year’s 1040 return
  • Go to line 76. This is the amount you paid to Uncle Sam. Let’s say you shelled out $20,000.
  • Then you subtract any withholding. Suppose for the year, this has come to $5,000. So, the net amount is $15,000 ($20,000 in taxes paid minus $5,000 in withholding).
  • Finally, divide this amount by 4 or $15,000 / 4, which is $3,750.

And that’s it!

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