Businesses

Sometimes, an S corporation must make estimated tax payments.

Generally, an S corporation must make installment payments of estimated tax for the following taxes if the total of these taxes is $500 or more:

• Tax on built-in gains,
• Excess net passive income tax,
• Investment credit recapture tax.

• Instructions for Form 1120-S, U.S. Income Tax Return for an S Corporation, see topic Estimated Tax Payments

• Partnerships file Form 1065, U.S. Return of Partnership Income to report income and expenses.
• A partnership doesn't pay tax on its income, instead, it "passes through" any profits or losses to its partners. Generally, the partnership must prepare and give partners a copy of Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc.,PDF or Schedule K-3 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc. - InternationalPDF.
• The partners report the information from the K-1 or K-3 on their own returns and pay any taxes due, including estimated taxes.

How Individual Partners Pay Estimated Tax

Because partners aren't employees of the partnership, partnerships don't withhold tax from their distributions to pay the partners' income and self-employment taxes shown on their Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors. The partners may need to pay estimated tax payments using Form 1040-ES, Estimated Tax for Individuals.

As a partner, you can pay the estimated tax by:

• Crediting an overpayment on your 2023 return to your 2024 estimated tax
• Mailing a check or money order with a payment voucher from Form 1040-ES
• Using Your Online Account
• Using Direct Pay
• Using EFTPS: The Electronic Federal Tax Payment System
• Requesting an electronic funds withdrawal (EFW) if you're filing Form 1040 or Form 1040-SR electronically
• Downloading and using the IRS2GO application on your mobile device
• Using a credit card, debit card, or digital wallet
• Paying with cash

See Payments for more information.

• About Publication 505, Tax Withholding and Estimated Tax
• Instructions for Form 1065, U.S. Return of Partnership Income
• Am I Required to Make Estimated Tax Payments?