How to Pay Estimated Taxes in the US: A Comprehensive Guide (2025)

Running a business or freelancing requires you to pay estimated taxes consistently to avoid penalties. It’s not always obvious how much tax you’ll owe, and if you don’t stay on top of things, it’s easy to fall behind—especially for self-employed people juggling multiple income streams. If you earn money without taxes automatically taken out, you may need to pay the IRS every quarter so you don't owe penalties later at tax time.

At P3 Accounting, we work with business owners and freelancers every day to help them understand how estimated tax payments work, what’s due when, and how to make it all easier to manage. This guide breaks it all down for 2025. Let’s get into it.

What Are Estimated Income Tax Payments?

Estimated income tax payments are payments made throughout the year, on specific dates. These payments cover income taxes on earnings like self-employment income, capital gains, and other income not subject to income tax withholding or payroll taxes. Ultimately, paying these regularly helps control your total tax and avoid an estimated tax penalty.

Who Should Make Estimated Tax Payments?

The Internal Revenue Service (IRS) expects you to pay estimated taxes if you:

• Are a self-employed business owner or freelancer with self-employment income.

• Receive income such as capital gains, dividends, rent, investment income, 1099 income, or other non-W2 income not taxed at source.

• Are a resident alien with taxable income throughout the year and not enough tax withheld.

• Are a W2 employee, but your income tax withholding is too low, and therefore, you expect to owe estimated taxes.

As a rule of thumb, if you expect to owe more than $1,000 when you file your return, you should be making quarterly payments. Meanwhile, corporations are typically required to make estimated tax payments if they anticipate owing $500 or more in taxes when they file their return.

2025 Due Dates for Estimated Taxes

These are the dates to remember when you pay quarterly taxes or quarterly estimated amounts:

Q1	April 15, 2025	Income earned Jan. 1 – Mar. 31
Q2	June 16, 2025	Income earned Apr. 1 – May 31
Q3	Sept. 15, 2025	Income earned Jun. 1 – Aug. 31
Q4	Jan. 15, 2026	Income earned Sep. 1 – Dec. 31

How Much Should Your Estimated Tax Payments Be?

The most common methods used in making estimated payments include:

Safe Harbor Rule

Review your previous year's tax liability and total tax paid. Pay at least 100% of your prior year’s tax liability (110% if your income was over $150,000). This protects you from penalties, even if you end up owing more.

Current Year Estimate

Base your payments on what you’re earning this year. This works best if your income is consistent or if you’re tracking it closely.

Note: For irregular income, use the annualized income installment method. This lets you calculate uneven quarterly payments that match when you earn income, which reduces late payment penalties and underpayment penalties.

Paying Estimated Tax Payments as a Married Couple

Married Filing Jointly

As a married couple choosing the married filing jointly status, you combine incomes and deductions, then split or submit one set of estimated tax payments using Form 1040-ES. You may coordinate a joint plan to make estimated tax payments evenly or adjust as needed.

Married Filing Separately

For married couples filing separately, each spouse calculates and pays estimated income tax payments individually. This setup may lead to unequal payments or the need for coordination, especially if one spouse receives income or deductions that the other doesn't. Each spouse submits their own vouchers or electronic payments.

How to Make Estimated Tax Payments

You can make estimated payments throughout the tax year via:

1. IRS Direct Pay: Pay directly from your bank account, for free, with no sign-in required. You'll receive confirmation instantly.

2. IRS Online Account: Track your tax payments, view past estimated payments, and plan ahead with access through your IRS online portal via IRS.gov/account.

3. EFTPS (Electronic Federal Tax Payment System): EFTPS is a secure electronic federal tax payment platform. You enroll, receive a PIN by mail, and can then schedule quarterly estimated payments up to a year in advance. It's quite flexible, especially if you want to make quarterly payments on time or one lump sum early.

4. Mailing a Check With Form 1040-ES Vouchers: You can still mail a check using the vouchers included with Form 1040-ES as long as the postmark is by the due date.

FAQs About Paying Estimated Taxes

What happens if I don’t pay estimated taxes on time?

The IRS charges an estimated tax penalty based on the underpayment amount, period of delay, and the current interest rate. This includes underpayment penalties and late payment penalties.

Do W-2 employees ever need to make estimated tax payments?

Yes. If withholding is too low, such as from side gigs, investments, or other income, you may still owe estimated taxes and need to make estimated tax payments.

Can I set up automatic payments through the EFTPS?

Yes, you can. Using EFTPS, you can schedule payments in advance, even lump-sum or staggered quarterly estimated payments. You can also modify them as needed.

How do I report my estimated tax payments on my tax return?

You may report your estimated tax payments on line 26 of Form 1040. If you chose to apply an overpayment from last year’s return toward this year’s taxes, include that amount as well.

Is there a penalty for overpaying my income taxes through estimates?

No. Overpaying simply means you’ll get a tax refund or a credit toward next year. Overpaying ensures you’ve paid enough tax to avoid penalties.

Stay Ahead of Your Tax Bill With P3 Accounting

Having a reliable partner can make paying taxes throughout the tax year a lot easier. At P3 Accounting, we make the entire process simpler, from calculating your quarterly payments to filing your income tax return accurately and on time. Whether you're trying to qualify for tax credits, maximize refundable credits, or just stay on track with equal payments, we're here to guide you through our professional accounting services.

We work with business owners, freelancers, and self-employed professionals who want to avoid underpayment penalties, take advantage of special rules, and understand how it all ties together—so you can spend less time stressing over numbers and more time growing your business.

Need help getting a bigger tax refund or making sense of your estimated tax schedule? Let's talk.