Estimated Tax The requirements for determining who must pay estimated tax are the same for a U.S. citizen or resident abroad as for a taxpayer in the United States. For current instructions on making estimated tax payments, see Form 1040-ES. If you had a tax liability for 2001, you may have to pay estimated tax for 2002. Generally, you must make estimated tax payments for 2002 if you expect to owe at least $1,000 in tax for 2002 after subtracting your withholding and credits and you expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your 2002 tax return, or 100% of the tax shown on your 2001 tax return. (The return must cover all 12 months.) If less than two thirds of your gross income for 2001 or 2002 is from farming or fishing and your adjusted gross income for 2001 is more than $150,000 ($75,000 if you are married and file separately), substitute 112% for 100% in (2) above. See Publication 505 for more information. The first installment of estimated tax is due on April 15, 2002. When figuring your estimated gross income, subtract amounts you expect to exclude under the foreign earned income exclusion and the foreign housing exclusion. In addition, you can reduce your income by your estimated foreign housing deduction. However, if the actual amount of the exclusion or deduction is less than you estimate, you may have to pay a penalty for underpayment of estimated tax.