Estimated tax payments are quarterly installments you send to the IRS if you don't have taxes withheld from a paycheck
If you're self-employed, a freelancer, a gig worker, or you have income that doesn't come with automatic tax withholding, the IRS expects you to pay taxes four times a year instead of once at tax time. These are called estimated tax payments, and they're due on specific dates set by the IRS. Missing a payment date can result in penalties and interest, even if you end up overpaying overall.
The four payment dates fall roughly every three months, and the amount you owe each quarter depends on your expected income for the year. You calculate this yourself — the IRS doesn't tell you how much to send. If you guess wrong, you'll either owe more when you file your return or get a refund.
Key Takeaways
- Estimated tax payments are due on April 15, June 15, September 15, and January 15 of the following year, with slight variations when dates fall on weekends or holidays.
- You calculate your own estimated tax using IRS Form 1040-ES, which walks you through your expected income, deductions, and tax rate for the year.
- You can pay online through IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS), by mail with a voucher, or by phone.
- If you underpay estimated taxes, you may owe a penalty even if you get a refund when you file your annual return.
- If your income changes during the year, you can recalculate and adjust your remaining payments instead of sticking to your original estimate.
The four payment dates and what happens if you miss one
The IRS sets four due dates each year. For the 2024 tax year, they are April 15, June 15, September 15, and January 15, 2025. If a due date falls on a weekend or federal holiday, the important date moves to the next business day. The IRS website lists the exact dates each year, so check there if a date falls near a holiday.
If you miss a payment date, you don't lose the right to pay — you can still send it in. However, the IRS charges underpayment penalties on the amount that was late, calculated from the original due date. The penalty is based on the federal interest rate, which changes quarterly. You'll owe the penalty even if you eventually pay more in total taxes than you owed, or even if you get a refund when you file your return. The only way to avoid the penalty is to pay on time or to meet one of the IRS's safe harbor rules (see below).
How to calculate what you owe using Form 1040-ES
The IRS provides Form 1040-ES, a worksheet that walks you through calculating your estimated tax. You'll need to estimate your total income for the year, subtract deductions you expect to claim, and explore your tax rate. The form includes worksheets for different types of income — wages, self-employment income, capital gains, and others — so you only fill in the sections that explore to you.
The form then tells you what to pay each quarter. Most people divide their annual tax into four equal payments, but you can pay different amounts each quarter if your income is uneven. For example, if you expect to earn most of your income in the fall, you could pay less in the spring and more in the fall.
If you're unsure about your income for the year, use your previous year's tax return as a starting point. If your income was similar last year, you can often use last year's tax as a rough guide. The IRS's safe harbor rule says that if you pay either 90 percent of your current year's tax or 100 percent of your previous year's tax (110 percent if your previous year's adjusted gross income was over $150,000), you won't owe an underpayment penalty, even if you owe more when you file.
Where to send your payment and payment methods
You have several options for paying estimated taxes. The most common is IRS Direct Pay, a free online system where you enter your payment amount and due date, and the IRS deducts the money from your bank account on the date you choose. You can set up Direct Pay on the IRS website without creating an account — you'll need your Social Security number, filing status, and bank routing and account numbers.
Another option is the Electronic Federal Tax Payment System (EFTPS), a separate system run by the U.S. Department of the Treasury. EFTPS requires you to enroll first, which takes one to two business days. Once enrolled, you can schedule payments online or by phone. EFTPS is useful if you want to set up recurring payments or if you prefer the Treasury's system.
You can also pay by credit or debit card through an IRS-approved payment processor, though these charge a processing fee (usually 1.5 to 2 percent of your payment). If you prefer not to pay online, you can mail a check or money order with Form 1040-ES voucher — the form includes a voucher for each quarter that you tear off and mail with your payment. Mail payments should arrive at least five business days before the due date to be considered on time.
What to do if your income changes during the year
Your estimated tax is based on a guess about your income, and guesses can be wrong. If you earn significantly more or less than you expected, you can recalculate your estimated tax and adjust your remaining payments. You don't have to stick with your original four equal payments.
To adjust, fill out Form 1040-ES again with your updated income estimate and recalculate what you owe for the rest of the year. If you've already paid for earlier quarters, those payments stay as they are — you only change the remaining quarters. For example, if you paid $2,000 per quarter but now expect to earn much less, you can reduce your third and fourth quarter payments to $1,000 each. If you expect to earn more, you can increase them.
Some people recalculate after each quarter based on what they actually earned. This takes more work but can reduce the chance of overpaying or underpaying significantly.
Safe harbor rules that protect you from underpayment penalties
The IRS offers two main safe harbor rules that let you avoid underpayment penalties even if you don't pay the full amount you'll owe:
- 90 percent of current year tax: If you pay at least 90 percent of the tax you'll owe for 2024 through estimated payments and withholding, you won't owe an underpayment penalty, even if you owe more when you file.
- 100 percent of previous year tax: If you pay at least 100 percent of the tax you owed in 2023 (or 110 percent if your 2023 adjusted gross income was over $150,000), you won't owe an underpayment penalty. This rule is useful if your income was similar last year — you can straightforward pay what you paid last year and avoid penalties.
These safe harbors exist because the IRS recognizes that income is unpredictable. You don't have to calculate your exact tax liability; you just have to stay within these guardrails. Many self-employed people use the previous-year rule as a straightforward way to avoid penalties while they figure out their actual tax for the current year.
Frequently Asked Questions
What happens if I pay estimated taxes but then don't owe anything when I file?
You'll get a refund of the overpayment when you file your tax return. The IRS doesn't penalize you for paying too much. However, you lose the use of that money for the year, so it's worth trying to estimate as accurately as possible.
Do I have to make estimated tax payments if I'm not sure I'll owe taxes?
If you think your income will be low enough that you won't owe federal income tax, you don't have to make estimated payments. However, if you're self-employed, you still owe self-employment tax (Social Security and Medicare tax) on your net earnings, even if you don't owe income tax. Use Form 1040-ES to see whether you'll owe anything.
Can I pay all four quarters at once instead of spreading them out?
Yes, you can pay your entire year's estimated tax in one payment if you want to. However, the IRS will still expect you to pay by the first quarter's due date (April 15) to avoid underpayment penalties on the later quarters. Paying all at once early is fine, but paying all at once on the final due date will result in penalties on the first three quarters.
What if I'm an employee but also have self-employment income?
You may be able to adjust your W-4 at your job to have more tax withheld from your paycheck, which counts toward your estimated tax requirement. This can be simpler than making separate estimated payments. Talk to your employer's payroll department about increasing your withholding, or use the IRS W-4 calculator on the IRS website.
Do I need to file a tax return if I only make estimated tax payments?
Yes, you still need to file a tax return for the year, even if you've made all your estimated payments. The return is where you report your actual income and deductions, calculate your final tax, and either get a refund or pay any remaining balance.