A $0 estimate is not cause for concern and does not mean there was an error with your estimated tax calculation.
There are several reasons you may receive a $0 estimate:
- Your tax withholdings from a W-2 exceeded the quarterly estimate from your private practice.
- You are not expected to owe more than $1,000 in taxes this year, in which case the IRS does not require you to submit quarterly estimated tax payments.
- Your practice is unprofitable. Because you owe income tax based on your net income or profit, if your expenses exceed your income, you won’t owe personal income taxes, and your estimate will be lower.
- You overpaid the estimated tax in prior quarters; you have already paid enough to cover your estimated tax for the year.
You can choose to pay more or less than the quarterly estimate Heard has calculated for you. If you feel like you may have additional income not accounted for in Heard and you want to pay a little extra to cover your bases, you may choose to do so.
For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you don't pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.