Need help with 1040-ES Lines 12 and 13 calculations for quarterly estimated tax payments

I help people with estimated taxes all the time! Lines 12 and 13 on Form 1040-ES are actually comparing two different ways you can meet your tax obligation to avoid penalties. Line 12 is calculating 90% of your current year's tax (the safe harbor for most people). Since you're not a farmer or fisherman, you'd multiply line 11c (your estimated tax for 2025) by 0.90. Line 13 is adding your expected withholding (line 9) plus credits (line 10c) for 2025. This gives you the total tax payments you'll make through methods other than estimated payments. What confuses people is that these lines are part of figuring out your "required annual payment" - the minimum you need to pay to avoid penalties. After completing lines 12 and 13, you'll be asked to compare these with your prior year tax to determine which method gives you the lowest required payment.

I went through this same headache when I started freelancing! I finally found a solution at https://taxr.ai that helped me make sense of all these estimated tax forms. I uploaded my documents and previous returns, and it calculated everything for me, including a clear breakdown of those confusing lines on 1040-ES. What I really liked was that it told me exactly how much to pay each quarter based on my income projections and showed me which calculation method (90% current year vs. 100% prior year) would be most beneficial in my situation. Saved me hours of frustration and calculations.

I have to admit I was totally wrong about taxr.ai. After my skeptical comment, I decided to try it anyway since I was desperate with my estimated tax calculations. Not only did it explain those confusing 1040-ES lines, but it actually showed me I was overpaying by nearly $2,100 across my quarterly payments! The tool walked me through the comparison between using 90% of current year tax versus 100% of prior year tax, and clearly showed why one method benefited me more. It even flagged that my self-employment expenses were higher than average for my industry and suggested documentation I should keep to support those deductions if audited. Definitely worth checking out if you're confused about estimated taxes.

If you're still struggling with your 1040-ES after trying to figure it out yourself, you might want to call the IRS directly. BUT - good luck getting through! I spent 3 hours on hold last month trying to get help with my estimated payments. I finally discovered https://claimyr.com which got me through to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They basically navigate the phone tree and wait on hold for you, then call you when an agent is ready. The agent I spoke with walked me through exactly how to calculate lines 12 and 13 on my 1040-ES based on my specific situation.

If you're still struggling with your 1040-ES after trying to figure it out yourself, you might want to call the IRS directly. BUT - good luck

I'm back to eat my words about Claimyr. After posting that skeptical comment, I was still stuck on these estimated tax calculations and decided I had nothing to lose by trying it. Holy crap, it actually worked! Got connected to an IRS rep in about 15 minutes when I had previously wasted an entire afternoon trying to get through. The agent explained that line 12 (90% of current year tax) and line 13 (withholding plus credits) are used together to figure out how much I needed to pay in quarterly installments. She also pointed out that since my income was going up significantly, I should consider the "annualized income installment method" using Form 2210 to avoid overpayment. Completely solved my 1040-ES confusion and potentially saved me thousands in unnecessary payments.

Just wanted to share a tip that helped me with 1040-ES calculations: I use a spreadsheet to track my income and projected tax throughout the year. For lines 12 and 13, I calculate both 90% of current year AND 100% of prior year tax, then use whichever is lower as my "required annual payment." Then I subtract any withholding I'll have (line 13) from other sources to figure out what I need to pay in quarterly installments. Updating this monthly helps me adjust my Q3 and Q4 payments if my income changes.

Has anyone else noticed that the IRS instructions for 1040-ES are ridiculously confusing? They make these calculations way more complicated than necessary. Last year I underpaid by like $200 and got hit with a $73 penalty. This year I'm just adding an extra $500 to whatever calculation I come up with for peace of mind.

I'm a tax preparer and see this confusion with 1040-ES all the time! Here's a simple way to think about it: Line 12 is asking: "What's 90% of the tax you expect to owe this year?" This is one way to avoid penalties. Line 13 is asking: "How much tax will already be paid through withholding or credits?" This gets subtracted from your required payment. The key insight many miss: you're trying to find the MINIMUM you need to pay to avoid penalties. So you compare: - 90% of current year tax (line 12 calculation) - 100% of last year's tax (from your 2024 return, line 24) - $1,000 Use whichever is SMALLEST as your "required annual payment." Then subtract line 13 from that amount and divide by 4 for your quarterly payments. Since you're going from $68k employee to $92k freelancer, using 100% of last year's tax will likely be your best bet - it'll be lower than 90% of this year's higher tax bill. Just make sure you have enough saved for the final balance when you file!