When must taxpayers make estimated tax payments if their tax is expected to be less than a certain amount?

Taxpayers are generally required to make estimated tax payments if their expected tax liability exceeds a certain threshold. In California, and particularly for federal guidelines, taxpayers must typically make estimated tax payments when they expect to owe $1,000 or more in tax after subtracting their withholding and refundable credits.

The correct answer reflects the threshold of $1,000, which is common in tax practices, requiring individuals to pay estimated taxes to avoid penalties. If the tax liability is less than this amount, taxpayers can often avoid making estimated payments without incurring penalties.

Choosing a lower threshold, such as $250, does not align with the common standard that necessitates estimated payments, as individuals can usually meet their tax obligations with regular withholding if their tax dues are below that level. This standard emphasizes the importance of understanding the specific criteria set forth by tax regulations regarding estimated tax payments.