Generally, if the following situations apply, a taxpayer must pay estimated tax for 2019.
After deducting his withholding and refundable credits, the taxpayer expects to owe a tax of at least $1,000 in 2019.
He expects his withholding plus refundable credits to be less than the smaller of the following two amounts:
100% of the tax shown on his 2018 tax return (the 2018 tax return must cover all 12 months), or
90% of the tax to be shown to be reported on his 2019 tax return.
If the taxpayer’s AGI for 2018 was greater than $150,000 ($75,000 if his filing status is Married Filing Separately), 110% of the tax shown on his 2018 tax return.
Example - Charlie Nolan expects to have a tax liability of $31,493 in 2019. His withholding plus refundable credits estimated for 2019 is $27,124. The projected amount owing is $4,369.00.
90% of the 2019 taxes equal $28,344. The difference between the 90% and the withholding and refundable credits is $1,220.
Charlie's 2018 tax was $29,963. The AGI for 2018 was $161,365 and 110% of his tax equals $32,959. Since his tax of $31,493 is less than $32,959, a difference of $1,466, Charlie does need to file estimated taxes for 2019.