Estimated Quarterly Taxes: Deadlines & Payment Guide
Stay ahead of IRS requirements with our complete guide to calculating, paying, and managing estimated quarterly tax payments throughout the year.
Estimated quarterly taxes are periodic tax payments made to the IRS throughout the year on income that is not subject to withholding. The U.S. tax system operates on a pay-as-you-go basis, meaning the IRS expects to receive tax payments as you earn income, not just at the end of the year. For employees, withholding from paychecks satisfies this requirement. For others, estimated payments fill that role.
You are generally required to make estimated tax payments if you expect to owe at least $1,000 in federal tax after subtracting withholding and refundable credits. This commonly affects self-employed individuals, freelancers, landlords, investors with significant capital gains or dividends, retirees, and anyone with substantial income not subject to withholding.
Missing estimated tax payments or paying too little can result in an underpayment penalty assessed by the IRS, calculated on a quarter-by-quarter basis. Even if you receive a refund when you file your annual return, you may still owe an underpayment penalty if your payments were not made on time throughout the year. Understanding the safe harbor rules and payment calculation methods is key to avoiding these penalties.
How It Works
Estimated taxes are paid in four installments throughout the year, with due dates that do not fall in evenly spaced quarters. The deadlines for 2025 tax year payments are April 15 (for January-March income), June 16 (for April-May income), September 15 (for June-August income), and January 15, 2026 (for September-December income). Payments are made using Form 1040-ES or electronically through IRS Direct Pay or EFTPS.
There are two primary methods for calculating estimated tax payments. The straightforward approach is to estimate your total tax liability for the year and pay 25% each quarter. The annualized income installment method (Form 2210, Schedule AI) is more complex but useful if your income is uneven throughout the year, as it calculates the required payment based on income earned in each period.
The IRS provides two safe harbor rules to help you avoid underpayment penalties. You are safe if you pay at least 90% of your current-year tax liability through estimated payments and withholding, or if you pay at least 100% of your prior-year tax liability (110% if your AGI exceeded $150,000). Many taxpayers use the prior-year safe harbor as it provides a known, fixed target regardless of income fluctuations.
Current Rates
| Bracket / Category | Rate | Applies To |
|---|---|---|
| Q1 Payment (Jan-Mar income) | Due April 15, 2025 | 25% of estimated annual tax |
| Q2 Payment (Apr-May income) | Due June 16, 2025 | 25% of estimated annual tax |
| Q3 Payment (Jun-Aug income) | Due September 15, 2025 | 25% of estimated annual tax |
| Q4 Payment (Sep-Dec income) | Due January 15, 2026 | 25% of estimated annual tax |
| Underpayment Penalty Rate | ~8% (varies quarterly) | IRS sets rate quarterly based on federal short-term rate + 3% |
Key Forms
Estimated tax payment voucher and worksheet for individuals
Underpayment of estimated tax penalty calculation
Annualized income installment method for uneven income
Report total estimated tax payments on your annual return
Deductions & Credits
Prior-Year Safe Harbor
Pay 100% of your prior-year tax liability (110% if AGI was over $150,000) to avoid underpayment penalties regardless of current-year income.
Withholding Adjustment
Increase W-4 withholding from a job or request withholding from pension/Social Security payments to reduce or eliminate the need for estimated payments.
Annualized Installment Method
If income is seasonal or irregular, use Schedule AI to calculate required payments based on income earned in each quarter rather than annual averages.
Penalty Waiver for Unusual Circumstances
The IRS may waive underpayment penalties for taxpayers who retired after age 62, became disabled, or experienced a federally declared disaster during the year.
Filing Tips
- Use the prior-year safe harbor method (100% or 110% of last year tax) for predictable quarterly payments even if your income varies.
- Set up IRS Direct Pay or EFTPS for electronic payments to get instant confirmation and avoid mailing delays.
- If you receive a large one-time payment, consider making an extra estimated payment that quarter rather than waiting.
- Review your estimated payment calculation mid-year and adjust Q3 and Q4 payments if your income is significantly different than expected.
- Keep records of all estimated payments including confirmation numbers, as the IRS occasionally fails to credit payments correctly.
- Consider increasing W-2 withholding late in the year to make up for missed estimated payments, since withholding is treated as paid evenly throughout the year.
Frequently Asked Questions
Who needs to make estimated quarterly tax payments?
What happens if I miss an estimated tax payment?
Can I just pay all my estimated taxes at once?
How do I calculate my estimated quarterly payment?
Do I need to make state estimated payments too?
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