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Estimated Tax Definition

February 26, 2021

Estimated tax is a quarterly payment of taxes due based on the filer’s reported earned income for the period. Most of those required to pay taxes quarterly are small business owners, freelancers, and independent contractors, who do not have taxes automatically withheld from their earnings.

Estimated taxes may be made for any type of taxable income that is not subject to withholding, including earned income, dividend income, rental income, interest income, and capital gains.

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