If you live or work in Wisconsin and have to pay IRS estimated taxes, there’s a good chance you need to pay Wisconsin estimated taxes as well.
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What do Wisconsin estimated taxes cover?
Most people are used to having state income tax withheld from their paychecks. The reason there’s tax withholding instead of you paying when you file your income tax return is that you’re supposed to pay taxes throughout the year.
When you have income that isn’t subject to Wisconsin state income tax withholding, you have to make estimated tax payments instead.
What is the minimum amount to pay Wisconsin estimated taxes?
You’ll usually need to pay Wisconsin estimated taxes if you’ll owe $500 or more when you file your Wisconsin income tax return.
The $500 minimum is less than the $1,000 minimum for IRS estimated taxes. It may also be different from the minimum amount to make estimated tax payments to another state you may have lived or worked in.
When are Wisconsin estimated taxes due?
Wisconsin estimated taxes generally follow the same deadlines as the IRS.
- Your first payment is due April 15th for money you earned in the beginning of the year
- Your second payment is due June 15th
- Your third payment is due September 15th
- Your final payment is due January 15th
In cases of weekends or holidays, the deadline may be extended to the next business day. Note that Wisconsin and the IRS may recognize different holidays, so any extended deadlines may not always be the same for both state and federal estimated taxes.
You usually need to pay 25% of your estimated taxes each quarter. So if you need to pay $1,000 over the year, you can pay $250 per quarter.
It’s generally also OK to pay extra in an earlier quarter and reduce your payment in a future quarter by the same amount. Many people who only owe a small amount like to pay it all upfront so they don’t have to worry about making payments during the year.
The rules for Wisconsin estimated tax payments for corporations are mostly similar with the main difference being that your payment deadlines may vary depending on your tax year.
How much do you have to pay in Wisconsin estimated taxes?
There are two ways you can calculate your Wisconsin estimated taxes.
- If you filed a Wisconsin income tax return last year, you can make estimated payments equal to 100% of your tax liability for last year.
- You can also make estimated tax payments that equal at least 90% of what you’ll owe this year.
Most people use the first option because it’s easier. The second option requires you to keep checking your math during the year. You may only want to use the second option if you realize your income for this year will be lower so paying 100% of last year’s taxes will be too much.
What’s the penalty for not paying Wisconsin estimated taxes?
If you don’t make the minimum estimated tax payments, the Wisconsin Department of Revenue will charge you interest. The interest rate varies and is calculated based on your underpayment, the estimated tax deadline, and when you actually paid.
If were a Wisconsin resident for all of the previous year and didn’t have any Wisconsin tax liability, you may be exempt from the penalty. However, it may still be a good idea to make estimated taxes to avoid having a big tax bill in April
The first-year exception generally doesn’t apply to non-Wisconsin residents or those who weren’t a resident for the entire year.
What should you do if you miss a quarter?
If you miss a quarter, pay the amount you missed as soon as you can. The sooner you pay, the less interest you’ll owe.
Keep in mind that if you missed a quarter because your income went down and money is tight, your estimated tax requirements for this year could be lower. You may not have actually missed a quarter, or you may not have to pay as much.
How do I pay Wisconsin estimated taxes?
You can make estimated tax payments through the Wisconsin Department of Revenue website or by mailing Form 1-ES. Remember that these payments are completely separate from your IRS payments and any payments to other states.
You can look up and confirm your payments online using this tool. It’s still a good idea to save your online payment receipt or a copy of your canceled check in case there are any issues with your payment.
If you’re paying estimated taxes on a side gig or investment income and have a main job that withholds taxes, you also have the option to increase your withholding at your main job. Your extra withholding would generally just need to cover whatever you’d have to pay in estimated taxes.
Special Rules for Pass-Through Entities
If you have a pass-through entity, such as a partnership or LLC, special rules apply.
If the pass-through entity has members who aren’t residents of Wisconsin, the entity generally must make quarterly withholding payments on the non-resident’s share of Wisconsin income. The usual estimated tax deadlines apply. You’ll also need to file an annual Form PW-1 to report the estimated taxes paid and reconcile any differences between the actual and estimated taxes.
Members who are residents of Wisconsin generally make their own estimated tax payments.