Legality - are quarterly taxes required?

The Underpayment of Estimated Tax by Individuals Penalty applies to individuals if you don't pay enough estimated tax on your income or you pay it late. The penalty may apply even if the IRS owes you a refund, but you made estimated payments later in the year instead of ratably or based on the actual timing of when your income was earned.

You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

• Your filed tax return shows you owe less than $1,000 or
• You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.

So, as long as you meet one of the rules above, you will not owe a penalty.  But if you don't meet any of those rules, then the IRS can assess a penalty for failure to pay estimated taxes.