WASHINGTON (CN) - Small business owners and the self-employed no longer will have to base their quarterly tax payments for annual estimated tax on the full amount of their previous year's tax.
As part of the American Recovery and Reinvestment Act of 2009 the Internal Revenue Service will allow quarterly tax payments to be based on 90 percent of the previous year's tax due.
To qualify for the reduced estimated tax payments, individual tax payers must have income of less than $500,000, and more than 50 percent of that income must come from a small business.
Tax payers will have to file an IRS Form 2210 "Underpayment of Estimated Tax By Individuals, Estates, and Trusts" at the beginning of each tax year to qualify for the reduced tax payments.
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