The United States income tax is a pay-as-you-go tax, which means that tax must be paid as you earn or receive your income during the year. You can either do this through withholding or by making estimated tax payments.
If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen.
For additional information, please refer to IRS Publication 505 Tax Withholding and Estimated Tax.
If you did pay 100% of your tax liability from the previous year, you would need to fill in that information in the program by using the following directions:
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.