If you prefer old-school payments, the IRS still accepts checks and money orders by mail. You write a check, attach it to the voucher with your Social Security number written on the check, and mail both to the IRS address printed on the form. Make the check payable to “United States Treasury.” As long as your envelope is postmarked by the deadline, the IRS counts it as on time. This method is slower and riskier—your check might get lost—but it works if you prefer physical proof. The requirement also triggers if your withholding and refundable credits will cover less than 90% of your 2025 tax bill, or less than 100% of your 2024 tax bill. If your adjusted gross income (AGI) was more than $150,000 in 2024, the threshold jumps to 110% of last year’s taxes instead of 100%.

IRS Form 4684 Instructions

If you’re an employee, your employer likely withholds tax from each paycheck, so you’re usually covered. The IRS expects you to keep up with your payment obligations throughout the year, not just when tax season hits. Cook CPA is committed to providing consulting, accounting, tax and auditing services that distinguish our common sense, uncommon service approach from any other CPA firms.

TurboTax Online/MOBILE

Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information. You don’t have to pay estimated tax for 2025 if you had no tax liability for 2024; you were a U.S. Partnership Accounting citizen or resident alien for the whole year; and your 2024 tax year covered a 12-month period. You had no tax liability for 2024 if your total tax was zero or you didn’t have to file an income tax return. If you have little or no income tax withheld from wages and earn significant other income, you may need to make quarterly estimated tax payments to the Internal Revenue Service (IRS).

Taxpayer Bill of Rights: Navigating IRS Protections

Making estimated tax payments is important since the U.S. tax system operates on a “pay-as-you-go” basis. This means the IRS expects you to pay a portion of your income as soon as you earn it. But anyone who receives income from which taxes haven’t been withheld needs to understand how and when to pay estimated taxes. For estimated tax purposes, the year is divided into four payment periods, about once every quarter. Each period has a specific payment due date as determined by the IRS (usually April 15, June 15, September 15, and January 15).

• That safe-harbor percentage rises to 110 percent if your 2024 income was $150,000 or more, whether single or married filing jointly (or $75,000 if married filing separately in 2025).
• Alternatively, the safe harbor is met if payments equal 100% of the tax shown on the prior year’s return.
• The form includes a worksheet that walks you through the entire calculation step by step.
• The due dates match the federal dates in most quarters, but California calculates payment amounts differently.
• Never accused of oversimplifying things, the IRS doesn’t break the tax year into four three-month quarters.
• EFile your federal Personal or Business Extension in just 5 Minutes!

International Tax Treaties Explained: A Beginner’s Guide

If you are making estimated payments, the next quarterly due date is January 15, 2026. You won’t owe an estimated tax penalty if the tax shown on your 2025 return, minus your 2025 withholding, is less than $1,000. These are things like half of your self-employment tax, IRA contributions, or student loan interest. Don’t be vague—think through estimated tax what applies to your situation.

Utilize the IRS Estimated Tax Calculator

• Remember to add the self-employment tax and any other federal taxes you expect to owe.
• The alternative is requesting that the custodian withhold a specific percentage of the conversion amount to cover the anticipated tax bill.
• If the result is $1,000 or more, then you must make estimated tax payments.
• While self-employment offers a number of benefits, such as flexible schedules, and the ability to create jobs, it also presents unique challenges.
• The IRS allows adjustments, and it prevents overpayment or underpayment.

You can even have federal income tax withheld from your Social Security income if you are receiving benefits. When you have an employer, tax payments are fairly straight forward. Through your payroll, taxes are automatically deducted and sent to the IRS, state, and local (if applicable) authorities. At the end of the year, when you complete your tax return, you find out if you have paid too much (you get a refund) or too little (you must pay the balance). And based on that, you can then change your tax withholding on your W-4 to withhold more or less taxes on each paycheck.

Should self-employment taxes be paid quarterly or yearly?

This includes income from dividends, awards, rent and self-employment. Anyone who’s receiving money from a pension or salary that’s subject to withholding may also owe estimated tax if they haven’t paid enough income taxes. If the IRS determines that you underpaid your estimated quarterly taxes, you’ll be subject to a penalty.

Consult a Tax Professional

Even if you can’t afford the whole payment right away, it’s best to pay what you can to avoid some of the interest. Since partners are not employees of the partnership, they also don’t withhold income for taxes. They will have to file form 1040-ES to pay their quarterly taxes. The IRS provides a variety of resources to help payroll taxpayers calculate their estimated taxes, including IRS tools and publications.

Farmers and fishermen get special treatment—they can make one huge payment by January 15 instead of four quarterly payments, or file and pay by March 1 without penalties. If your adjusted gross income in 2024 was more than $150,000 (or more than $75,000 if married filing separately), the IRS tightens the rule. Instead of 100%, you must pay 110% of what you owed in 2024. This rule applies because higher-income taxpayers usually have growing incomes and shouldn’t underpay. If you owed $50,000 in 2024 and hit the $150,000 AGI threshold, pay $55,000 for 2025 ($50,000 × 1.10) to stay safe.

The Three Safe Harbor Rules That Protect You from Penalties

For this method, you’ll need to forecast your income and tax deductions for the year, and then calculate your tax obligation. You’ll want to ensure you’re paying at least 90% of the tax you expect to owe. Note that you may need to pay estimated taxes for your state as well. The due dates and requirements for many states may also differ from the IRS.