The distinction matters for US citizens, green card holders, self-employed people, investors and anyone with income from both countries. Under the IRS guidance for citizens abroad, US citizens and resident aliens are generally taxed on worldwide income, wherever they live.
This guide explains what each form does, how they connect, and which one fits your situation. Check current IRS instructions for deadlines and eligibility before you act.
Key Takeaways
- Annual Form 1040 reports actual income, credits, payments and your final refund or balance due.
- 1040-ES estimates current-year tax and covers shortfalls when withholding is not enough.
- Pay via 1040-ES during the year, then claim those amounts on Form 1040.
- Australian residents should weigh foreign income, exchange rates, foreign tax credits and ATO filings.
1040 vs 1040-ES: Quick Comparison
| Item | Form 1040 | Form 1040-ES |
|---|---|---|
| Purpose | Final return: calculates tax liability, refund or balance due | Worksheet and vouchers to estimate and pay current-year tax |
| Tax period | A completed tax year | The current year, updated if circumstances change |
| Main users | Individuals who must file a US return, including eligible US persons in Australia | Self-employed people, contractors, investors, landlords with little or no withholding |
| What you submit | The return with its schedules and attachments | A voucher only if paying by cheque or money order |
| Timing | After year end | During the year, in instalments |
The two forms are complementary. Form 1040-ES pays tax in advance, and Form 1040 reports the final result and credits what you've already paid.
The 2026 Form 1040-ES says to send the payment voucher only when paying by cheque or money order. Online payments identify you and the tax period electronically, so no voucher is mailed. The worksheet is just the calculation step.
What is Form 1040?
Form 1040 is the annual US individual income tax return. It reports income, deductions, credits, tax withheld, estimated payments, and the amount owed or refunded.
Who files from Australia
Living in Australia doesn't remove a US filing obligation for citizens or green card holders. Gross income includes foreign-source income. Nonresident aliens with US-source income generally use Form 1040-NR instead.
Filing thresholds vary by status and age. For tax year 2025, the IRS Form 1040 instructions list $15,750 for a single filer under 65 and $31,500 for joint filers who are both under 65. Self-employed people generally must file once net self-employment earnings reach $400.
What goes into the return
- Employment or business income
- Investment and rental income
- Foreign income
- Deductions and credits
- Withholding and estimated payments
Form 1040 then reconciles everything. Payments made through 1040-ES appear on the 2026 draft form at line 26 ("estimated tax payments and amount applied from 2025 return"), and feed the refund or balance calculation.
Australian cross-border points
- Claim the foreign tax credit on Form 1116 for qualifying foreign tax paid on foreign-source income
- Use Form 2555 for the foreign earned income exclusion only if you have a foreign tax home and meet the bona fide residence or physical presence test
- Report in US dollars with a consistent, documented exchange rate (IRS yearly average for 2025: 1.551 AUD per USD)
- Apply the US-Australia treaty carefully: its saving clause still lets the US tax citizens, and a US filing does not replace Australian reporting (or vice versa)
- Get advice on superannuation before assuming any outcome; US treatment is unsettled and case-specific
- Check FBAR and Form 8938 separately; either may apply even when an account earns nothing taxable
Related versions
- 1040-SR: Optional for taxpayers 65 or older; same schedules and instructions.
- 1040-NR: For nonresident aliens.
- 1040-X: Amends a previously filed return.
What is Form 1040-ES?
Form 1040-ES is the IRS package of worksheet and payment vouchers for estimating and paying expected tax during the year. It applies to income without withholding, such as self-employment, interest, dividends and rent.
Who needs to pay estimated tax
Under the 2026 rule, you generally pay estimated tax if both apply:
- You expect to owe at least $1,000 after withholding and refundable credits.
- Withholding and credits will be less than the smaller of 90% of 2026 tax or 100% of 2025 tax.
If 2025 AGI exceeded $150,000 ($75,000 if married filing separately), the prior-year test becomes 110%. No payments are needed if you had no tax liability for the full 2025 tax year.
The worksheet estimates taxable income, deductions, credits, income tax and self-employment tax. The self-employment rate is 15.3%. Revisit the estimate when income, gains, profits or withholding change. That matters most with irregular or cross-border income.
Underpayment can bring a penalty, calculated on Form 2210. If your income is uneven, the annualised instalment method may reduce early payments.
Payment schedule
| Income period | Due date |
|---|---|
| Jan 1 – Mar 31, 2026 | April 15, 2026 |
| Apr 1 – May 31, 2026 | June 15, 2026 |
| Jun 1 – Aug 31, 2026 | September 15, 2026 |
| Sep 1 – Dec 31, 2026 | January 15, 2027 |
The January payment isn't required if you file your 2026 return by February 1, 2027 and pay the balance in full. The 2026 return itself is due April 15, 2027, according to draft IRS guidance.
Online payment options include:
- IRS Direct Pay (free, no sign-in)
- IRS Online Account
- Card payments (with fees)
New individual EFTPS enrolments are closed.
Applying it from Australia
The same estimated-tax rules apply abroad, and the first instalment is due April 15. The automatic June 15 filing extension for people abroad doesn't defer payment or stop interest on tax unpaid from April 15. Don't include income that is or will be exempt from US tax in your estimate.
For an Australian-based freelancer, business owner or investor, calculations also need to account for Australian tax paid and exchange-rate movements. Complex interactions deserve professional review.
Which Form Should You Use? Real-World Examples and Decision Guide
Use Form 1040 to report actual income and complete the annual return. Use Form 1040-ES to make advance payments toward expected current-year tax. Many taxpayers need both: 1040-ES during the year, then Form 1040 to report and reconcile.
Situations
- Employee with full US withholding: Form 1040 is usually enough if wages are fully withheld and you meet filing requirements.
- Contractor, business owner, landlord or investor with thin withholding: Likely 1040-ES during the year and Form 1040 afterwards.
- Refund expected, or payments made online: You may not need to mail any 1040-ES voucher. Confirm the process for your payment method.
A worked IRS example
Publication 505 (2026) illustrates the safe-harbour rule with 2025 tax of $42,581, expected 2026 tax of $71,253 and 2025 AGI of $180,000. The required annual payment is $46,839, the smaller of 90% of expected 2026 tax ($64,128) and 110% of 2025 tax ($46,839).
That generic illustration shows why the prior-year safe harbour can sharply cut what you pay in advance.
Getting support
VJM Global prepares US individual returns, including Form 1040 and Form 1040-NR, and has served 250+ Australian businesses. If you are based in Australia with US tax obligations, uncertain estimated payments, foreign income or several forms to file, its US-compliant tax professionals can provide tailored compliance support.
Conclusion
Form 1040 is the annual return for reporting income and calculating your tax. Form 1040-ES supports estimated payments during the year. Neither replaces the other.
For Australians with US obligations, getting this right means timely payments, accurate foreign income reporting, correct use of credits, and a lower risk of underpayment penalties or filing errors. Verify current IRS instructions each year. Seek advice when your cross-border position is complicated.
Frequently Asked Questions
Who needs to file Form 1040-ES?
People whose taxable income isn't sufficiently covered by withholding, including many self-employed individuals, contractors, investors and landlords. Check current IRS thresholds and safe harbor rules.
What are the different types of 1040 forms?
The standard Form 1040 is joined by 1040-SR (age 65+), 1040-NR (nonresident aliens) and 1040-X (amended returns). Confirm which applies to your circumstances.
What is the difference between Form 1040 and Form 1040-ES?
Form 1040 reports actual income and final tax for a completed year. Form 1040-ES estimates and pays current-year tax in advance.
Do I need to file both Form 1040 and Form 1040-ES?
Some taxpayers pay through 1040-ES during the year, then report those payments on Form 1040. The need depends on income, withholding and filing obligations.
Do I need Form 1040-ES if I pay estimated taxes online?
Online payment doesn't require mailing a paper voucher, though the worksheet still helps calculate the amount. Follow current IRS instructions for your payment method.
Can Australian residents file Form 1040?
Yes. Eligible US citizens, green card holders and others with US filing obligations may need to file from Australia. Residency and income type determine the correct form and any extra reporting.
