How can taxpayers determine their estimated tax payments?

Taxpayers can determine their estimated tax payments primarily based on the previous year's actual tax liability. This method is generally used because it provides a practical and straightforward approach for estimating current year tax obligations. The IRS allows taxpayers to use their previous year’s tax liability as a guide, which can help ensure that they are making payments that approximate their actual tax liability for the current year. This is particularly useful for those whose income and deductions are relatively stable year over year.

While consulting a tax advisor can provide personalized guidance and assistance, it is not the only method available for determining estimated payments. Using standard deductions alone does not take into account the full picture of an individual's tax situation, such as additional income or credits that might affect the total tax owed. Furthermore, relying exclusively on the IRS website might limit a taxpayer’s understanding, as they should also consider their individual circumstances and past tax performance, in conjunction with any resources available online. Thus, basing estimated payments on last year’s tax liability is a widely recognized and effective strategy.