(Washington, DC) The Office of Tax and Revenue (OTR) issued a reminder today to taxpayers about the importance of timely paying estimated taxes. In 2005 OTR began to automatically charge a penalty for underpayment of estimated taxes when quarterly totals of withholdings plus estimated tax payments were less than the required quarterly payment amounts. Individuals, financial institutions and businesses will be charged a 10 percent penalty, compounded daily, for underpayment of their estimated taxes.

To avoid such charges, taxpayers should remember the following instructions.

For individual and fiduciary returns:

• You must pay estimated taxes if you are a District resident, your gross income is not fully subject to withholding tax, and you have a remaining tax liability of more than $100 after payments and credits for the tax year.
• If you are a DC resident, you must also pay estimated taxes on any wages you earn outside the District, unless your employer pays DC withholding taxes.
• You must make your four estimated payments with vouchers from your D-40ES booklet. They are due April 15, June 15, September 15, and January 15.

For corporation, financial institution, and unincorporated business returns:

• Each corporation, financial institution and unincorporated business that is required to file a return must pay estimated taxes if its tax for the year is expected to be more than $1,000.
• Businesses and financial institutions can pay their estimated tax payments online via the Electronic Taxpayer Service Center or with vouchers from the D-20ES or D-30ES payment voucher booklet.

For additional information, visit the Estimated Tax Penalty section, call (202) 727-4TAX, or visit OTR’s Customer Service Walk-In Center at 941 North Capitol Street, NE, on the first floor.