What is it and do I have to do it?

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Let’s start with a basic definition. The IRS defines estimated tax as the method used to pay tax on income that is not subject to withholding. This income includes earnings from self-employment, interest, dividends, rents, and alimony. Taxpayers who do not choose to have taxes withheld from other taxable income should also make estimated tax payments, such as unemployment distributions that you elect