How to Estimate Your Tax for an Extension

Why the estimate matters

To get the extension, Form 4868 says you must properly estimate your tax using the information available to you and enter it on line 4. If the IRS later finds the estimate wasn't reasonable, the extension is null and void. A good-faith number based on your actual documents meets that bar; a blank line or a guess doesn't.

The estimate also decides how much you should pay by April 15, 2027. Underestimate, and interest and penalties run on the gap.

Estimating line 4: total tax

Line 4 is the total tax you expect to report: line 24 of Form 1040, 1040-SR or 1040-NR (Form 1040-SS: Part I, line 7). That's your income tax after credits, plus other taxes such as self-employment tax.

1. Find last year's total tax on line 24 of last year's return.
2. List what changed: pay raises, a new job, a side business, a big 1099, stock sales, a home sale, marriage, a new child, retirement income.
3. Add up this year's income from the W-2s and 1099s you have. Use bank and brokerage year-end statements for the ones that haven't arrived.
4. Run the numbers in tax software or the form instructions if you can, even roughly. A draft return is the most accurate estimate.

Estimating line 5: payments

Line 5 is the total payments you expect to report on line 33 of Form 1040 (not counting the payment you make with Form 4868):

• Federal income tax withheld, from box 2 of your W-2s and the withholding boxes on 1099s.
• Estimated tax payments you made for the year, and any overpayment from last year applied to this year.
• Refundable credits you expect to claim.

A worked example

This is an example with round numbers, not tax advice. A single filer's total tax last year was $6,000. This year they got a raise and started freelancing, earning about $12,000 on 1099s with no withholding.

• They figure the raise adds about $800 of income tax, and the freelance income adds roughly $1,800 of income tax and $1,700 of self-employment tax. Line 4: about $10,300.
• Their W-2 shows $6,900 withheld, and they made no estimated payments. Line 5: $6,900.
• Line 6, the balance due: $3,400. They pay it online by April 15, 2027 and mark it as an extension, which is their extension.

When you're not sure

• Err high. Paying a little too much comes back as a refund. Paying too little costs interest and penalties.
• Missing a form? Use the best number you have: last year's figure for the same account, or your year-end statement.
• Expect zero tax? Enter -0- on line 4. That's allowed.

Questions people ask

What if my estimate turns out wrong?

If it was a reasonable estimate when you made it, the extension stands. You settle the difference on your return: pay any extra with interest, or get a refund.

Can I enter zero if I don't know?

Only if you really expect no tax. Use your documents to make a real estimate.

Do I need to send my calculations?

No. Keep your worksheet with your records.

Common mistakes

• Entering 0 when you know you'll owe. That isn't a reasonable estimate.
• Forgetting self-employment tax on freelance or gig income.
• Putting this payment on line 5. It belongs on line 7.
• Using withholding from the wrong year. Line 5 is payments for the year you're extending (2025 on the current form).