How to Make Quarterly Estimated Tax Payments in 2025

Accounting Strategies for Business Growth

Paying taxes is an essential obligation of financial accountability. While employees typically have taxes withheld from their paychecks, self-employed individuals, business owners, and those relying on investment income must proactively make quarterly estimated tax payments. Here is a comprehensive guide to help you manage your quarterly tax payments in 2025.

What Are Estimated Quarterly Tax Payments?

Estimated quarterly tax payments are payments made to the IRS (or state tax authorities) throughout the year by individuals or businesses who do not have taxes automatically withheld from their income, such as freelancers, self-employed workers, or business owners. These payments are made in four installments, usually due in April, June, September, and January of the following year, based on the estimated amount of tax a person will owe for the year. The purpose is to pay taxes incrementally, rather than in one lump sum at the end of the year.

Who Needs to Make Quarterly Estimated Tax Payments?

Quarterly estimated tax payments are generally needed by people who:

1. Are self-employed: If you work for yourself, you don’t have taxes automatically taken out of your income.

2. Have additional income: This includes things like rental income, dividends, interest, or side jobs, where tax isn’t withheld.

3. Don't have enough tax withheld: If you’re employed but your tax withholding isn’t enough (like if you have a second job or big bonuses), you may need to pay estimated taxes.

4. Earn income from investments: This includes capital gains or other earnings where no tax withholding happens.

If you expect to owe $1,000 or more in taxes when filing your return, you generally need to make these quarterly payments.

Quarterly Payment Tax Due 2025

The tax-due 2025 payments are displayed in the table below.

Payment When Income Earned Due Date
4th Quarter Payment (from 2024) Sept. 1 to Dec. 31, 2024 Jan. 15, 2025
1st Quarter Payment 2025 Jan. 1 to March 31, 2025 April 15, 2025
2nd Quarter Payment 2025 Apr. 1 to May 31, 2025 June 17, 2025
3rd Quarter Payment 2025 June 1 to Aug. 31, 2025 Sept. 16, 2025
4th Quarter Payment 2025 Sept. 1 to Dec. 31, 2025 Jan. 15, 2026

How to Pay Estimated Taxes

Calculating quarterly taxes might feel intimidating, but the payment process is quite similar to filing annual taxes—with a few key distinctions.

Forms for Quarterly Tax Payments

Form 1040-ES vs. Form 1120-W

The process for paying quarterly taxes differs slightly between individuals and businesses:

The "Estimated Tax for Individuals" form, 1040-ES, must be filled out by individuals. Companies must fill out Form 1120-W, which includes rules for tax calculation and a variety of deduction possibilities.

Both formats are accessible via:

  • • The IRS websiteyment.
  • • Local IRS offices
  • • Tax professionals
  • • Tax preparation software
  • • Potentially, your local post office or library (call ahead to confirm availability).
  • • Payment Methods for Quarterly Taxes

The IRS offers several convenient ways to pay quarterly taxes:

Online Payment Options

IRS Direct Pay

Ideal for individuals, this method allows you to pay directly from your bank account without any additional fees. It’s a straightforward and reliable way to handle both estimated and annual tax payments.

Electronic Federal Tax Payment System (EFTPS)

Favored by many businesses, the EFTPS provides detailed payment tracking and is available to both individuals and businesses. Advance enrollment is required, so plan ahead.

Credit or Debit Card

When paying taxes to third-party sellers, you can use a credit or debit card. If you use a credit card with a rewards program, this option may be alluring even though there are costs involved.

Wire Transfer

For last-minute payments, a wire transfer directly to the IRS is the fastest option. Be sure to follow all IRS guidelines carefully.

Payment by Mail

Check or Money Order If you prefer traditional payment methods, you can mail a check or money order made out to the United States Treasury.

Include the following on your payment:

  • • Social Security Number
  • • Tax form number (e.g., 1040-ES or 1120-W)
  • • Tax period related to the payment
  • • Payment Voucher

Incorporate the pertinent payment voucher, which is a component of your tax records, with your check or money order when mailing it. Your payment will be processed accurately thanks to this.

Tips for Electronic Payments

If you plan to use EFTPS or IRS Direct Pay, set up your account before your tax payment deadline. For example, EFTPS requires several days for enrollment and verification, including identity and bank account confirmation. By understanding the differences between payment methods and preparing in advance, you can make quarterly tax payments easier and stress-free.

Penalties for late estimated tax payments

If you do not pay or underpay estimated taxes, the following consequences may apply:

  • 1. Penalties and Interest: The IRS may impose penalties and interest for underpayment. This includes a penalty for not paying enough taxes throughout the year, which is calculated based on the amount underpaid and the period during which the underpayment occurred.
  • 2. Increased Tax Liability: Any unpaid estimated tax amounts will be added to your final tax bill for the year, increasing the amount you owe when you file your return.
  • 3. Possible Legal Action: If the IRS determines that the underpayment was intentional or severely negligent, they may take legal action, including levying fines or initiating collection procedures.
  • 4. Loss of Refund: If you typically receive a tax refund, underpayment of estimated taxes can result in reduced or eliminated refunds.
  • 5. Impact on Future Filings: Consistent underpayment may lead to additional scrutiny of your future tax filings and even trigger audits.

To avoid these consequences, it's crucial to estimate and pay taxes accurately and on time.

Strategies for Maintaining Focus

  • Set Reminders: To prevent late fees, mark due dates in your calendar.
  • Keep Records: For your tax records, keep copies of your Form 1040-ES and your payments.
  • Speak with a Tax Expert: Consult a tax professional if you have any questions regarding requirements or calculations.
  • Use accounting software: Tax computations and reminders can be made easier using programs like QuickBooks or TurboTax.

Frequently Asked Questions

1. What occurs if I fail to pay my taxes on time each quarter?

IRS penalties may apply if a payment is missed. If you pay at least 90% of your entire tax bill or match 100% of the tax from the prior year, you can avoid fines.

2. Can my quarterly payments be changed?

Indeed. You can modify your payment for the following quarter if your income fluctuates over the year.

3. Where can I locate IRS estimated tax forms?

IRS Form 1040-ES is available for download here.

4. Do I have to submit my taxes every three months?

Yes, if you anticipate having debts of at least $1,000 by 2025. This mostly pertains to independent contractors and self-employed people.

Make sure you get in touch with Miltafs for professional advice on handling your quarterly taxes due dates in 2025. We are here to guide you through your tax responsibilities and make sure you don't miss any deadline for tax payments.

Conclusion

There is no need to worry about making quarterly anticipated tax payments in 2025. You can guarantee compliance and stay out of trouble by remaining organized, maintaining accurate documents, and meeting deadlines. Recall that the secret to preserving your financial stability and peace of mind is to be proactive with your taxes.