Instead, Durand recommends setting aside a portion of the new cash for the taxes. And get ready to send it in before the spring tax deadline, she says, because "the IRS wants people to be paying their taxes during the year."

Estimated filing schedule
To meet the pay-taxes-as-you-earn goal, the IRS has set up an estimated tax timetable calling for the filing of a 1040-ES voucher four times a year. If you prefer, you now can pay electronically with a credit card or by enrolling in the tax agency's Electronic Federal Tax Payment System, or EFTPS.

Although the payments are commonly called quarterly, they don't coincide with the calendar quarters.

Estimated filing schedule

The IRS prefers that you figure the total amount of estimated tax you'll owe in April, divide it by four and send in equal payments according to the schedule. There's a work sheet with the Form 1040-ES package to do exactly that.

Meeting the IRS requirement
Eva Rosenberg, an enrolled agent and the Web's TaxMama, offers an easier alternative to the IRS paperwork if you expect your taxable income to be the same or higher than it was last year.

All you need is last year's tax return and statements showing current tax withholding.

Figuring estimating filing

Rosenberg's method works even if you expect to owe substantially more in taxes this year than you did the previous one. This is because the IRS considers estimated taxpayers compliant as long as they pay either 90 percent of their eventual tax bill or a "safe-harbor" payment based on a percentage of the tax owed the previous year.

Many taxpayers opt for the safe-harbor payment of 100 percent of their prior year's tax bill because it gives them a specific number to work with. Even better, it protects them from penalties and interest regardless of how high their upcoming final tax bill goes.