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People who work for companies have estimated taxes withheld from their paychecks, but self-employed people, business owners, and those who live on investment income are required to proactively pay estimated taxes on a quarterly basis.
In the United States, income taxes are pay-as-you-go. If you don’t keep up with payments, you could end up with a large tax bill in addition to penalties for late payment when it comes time to file your return.
Key Takeaways
- Business owners and self-employed people are required to proactively pay estimated income taxes on a quarterly basis.
- In general, anyone who expects to owe $1,000 or more is required to pay quarterly estimates (unless their taxes are automatically deducted by an employer).
- Estimated tax payment deadlines are usually April 15, June 15, Sept. 15, and Jan. 15 of the following year, with occasional adjustments to the next business day for holidays.
When Are Estimated Tax Payments Due?
Estimated tax payments are typically made incrementally, on quarterly tax dates: April 15, June 15, Sept. 15, and Jan. 15 of the following year, unless a due date falls on a weekend or legal holiday. Here are the dates for 2025:
| 2025 Due Dates for Estimated Taxes | |
|---|---|
| Payment Period | Due Date |
| Jan. 1 to March 31 | April 15, 2025 |
| April 1 to May 31 | June 15, 2025 |
| June 1 to Aug. 31 | Sept. 15, 2025 |
| Sept. 1 to Dec. 31 | Jan. 15, 2026 |
While the first quarter is the first three calendar months of the year, the second “quarter” is only two months long (April 1 to May 31). The third quarter is the next three months (June 1 to Aug. 31), and the fourth quarter covers the final four months of the year.
If a due date falls on a weekend or legal holiday, payments are due on the next business day. In 2022, for example, the deadline to pay first quarter estimated taxes was Monday, April 18, due to the Emancipation Day holiday in Washington, D.C., which falls on Friday, April 15. (By law, Washington, D.C., holidays affect federal tax deadlines.)
Who Pays Estimated Taxes?
Anyone who expects to owe $1,000 in taxes after taking into account any withholding and refundable tax credits such as earned income credits and premium tax credits will need to file estimated taxes.
Self-employed people, small business owners, and anyone else who receives income that has not had taxes withheld from it need to pay estimated taxes to avoid or minimize penalties for late payment.
If you receive pension or annuity income, you can ease the burden by filing Form W-4P with the plan administrator to have tax automatically withheld. You can also opt for voluntary withholding on payments such as Social Security benefits and unemployment benefits by filing Form W-4V.
If you have income from an employer in addition to independent contractor income or investment income, you can increase the amount of your withholding from your paycheck by filing a new Form W-4 with your employer in lieu of paying estimated quarterly taxes.
What’s New for Tax Year 2025
When you go to file your 2025 taxes (the ones you’ll file in 2026), you’ll want to take these updates and adjustments into account:
- The standard deduction for tax year 2025 increases to $30,000 for married couples filing jointly, $15,000 for single taxpayers and married couples filing separately, and $22,500 for heads of household.
- The maximum Earned Income Tax Credit (EITC) for 2025 is $8,046 for taxpayers with three or more qualifying children. To qualify for the EITC, your investment income must have been less than $11,950.
- The annual exclusion for gift taxes increases to $19,000 per donee for tax year 2025.
- The maximum amount individuals could contribute to their 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan in 2025 increased to $23,500, up from $23,000 in 2024. The catch-up contribution limit for employees aged 50 and over remains the same at $7,500.
- For IRA accounts, the 2025 contribution limit remains the same at $7,000 as in 2024. Catch-up contributions for individuals aged 50 and over remained at $1,000.
Inflation Adjustments
Dozens of tax breaks are adjusted annually for inflation, such as the IRS standard mileage rates. These may get you a tax break even if your income remained consistent from tax year to tax year.
Changes in Circumstances
Consider what was new for you in 2025. Did a marriage or divorce change your filing status and the associated tax rates? Has a new home purchase entitled you to deductions for mortgage interest and real estate taxes?
Life events can affect your taxes.
Am I Required to Pay Estimated Taxes?
If you don’t work for an employer who withholds taxes from each paycheck and you expect your tax bill to be more than $1,000, you are required to pay estimated taxes.
Self-employed people and small business owners are among those who pay quarterly estimated taxes.
How Do I Pay My Estimated Taxes?
What Happens If I Don’t Pay My Estimated Taxes?
If you don’t pay estimated taxes throughout the year, you will end up with a large tax bill when you file your tax return. You will also be subject to penalties for late payment on the taxes, which are owed quarterly.
The Bottom Line
While estimating taxes isn’t an exact science, coming close to the correct amount will help you avoid penalties if you’re mindful of the quarterly deadlines. It can be a good idea to consult a tax professional when questions arise about complex tax issues.