Which entities are generally required to make estimated tax payments if they expect to owe $500 or more?

The correct answer is that corporations are generally required to make estimated tax payments if they expect to owe $500 or more. Corporations, unlike individuals and certain other entities, operate under different tax regulations that mandate them to pay estimated taxes throughout the year based on their expected tax liability. This requirement helps the IRS ensure that tax revenue is collected throughout the year, reducing the chance of a significant tax bill at the end of the year.

It’s essential to note that individuals also have an obligation to make estimated tax payments if they expect to owe $1,000 or more in tax for the year, distinguishing their requirement from that of corporations. Trusts and nonprofit organizations may also be subject to different rules regarding estimated payments, but the threshold concerning estimated tax payments generally applies differently to corporations. Nonprofit organizations, for instance, often do not owe federal income tax unless they have unrelated business income, which would not trigger a standard payment requirement in the same way that corporations and individuals face.