Write down your 2018 federal income tax withholding as listed on your final 2018 paycheck.
Add any estimated quarterly tax payments made for Q1, Q2, and Q3 of 2018.
Add together the total of tax payments to date from Step 1 and Step 2.
Complete an AAII 2018 Tax Forecasting Worksheet with actual or best estimate numbers (using 2017 figures as a reference point): .
Compare the Total Tax figure on the AAII worksheet with your 2018 withholding and Q1-Q3 estimates.
If you are projected to owe money, make sure that you have paid (through employer tax withholding and/or timely quarterly estimated tax payments) either:
If you don’t meet either of the safe harbor rules and will owe more than $1,000 in 2018 because your 2018 income tax withholding was insufficient, download IRS Form 1040-ES at .
Calculate the difference between your withholding to date (Step 3) and the amount that should be withheld as per safe harbor b (see Step 6, above).
Review the 1040-ES form and print out Payment Voucher 4 for fourth quarter estimated taxes due January 15, 2019.
Return Payment Voucher 4 with the amount that needs to be paid as per Step 8. Make sure that your payment is postmarked by January 15, 2019 or it will be considered late and you may be charged a penalty.
Adjust 2019 tax withholding according to the data described above. For example, if your income tax withholding was $2,600 short in 2018 and you receive 26 bi-weekly paychecks, have $100 more withheld from each 2019 paycheck.
Double-check your 2019 income tax withholding estimates using the online IRS Withholding Calculator: .