2025 Guide to Quarterly Estimated Tax Payments: Rules, Deadlines, and Requirements

If you earn income without tax withheld, like from freelance work, rental properties, or investments, you may need to make quarterly estimated tax payments. Missing them could lead to penalties, even if you pay your full balance by tax day.

Many self-employed people, small business owners, and side earners find this confusing. But knowing the basics can help you avoid surprises and stay on track.

This article covers who needs to make estimated payments, how to calculate what you owe, and the key deadlines for 2025. If you receive untaxed income, this guide will help you understand the rules and stay compliant with the IRS.

📌 Also Read: What Are Itemized Tax Deductions?

Why Does the IRS Require Quarterly Estimated Tax Payments?

The U.S. tax system follows a pay-as-you-go approach. This means taxes are generally due as you earn or receive income, not just once a year during tax season.

There are two main ways to meet this obligation:

✅ Withholding:

If you earn a salary or wages reported on Form W-2, your employer usually withholds taxes from each paycheck. This also applies to other income types, such as bonuses, commissions, pensions, and gambling winnings.

✅ Estimated Tax Payments:

If your income is not subject to withholding, you may need to make quarterly estimated tax payments. This often applies to people who receive self-employment income, dividends, interest, capital gains, rental income, or royalties.

Many first-time business owners assume they can pay their taxes in one lump sum when they file. But for income that is not automatically taxed, the IRS generally expects four separate payments spread across the year.

These payments help ensure the government receives funds regularly, which supports ongoing operations and public services. If you do not pay enough throughout the year, you could face penalties, even if you are owed a refund at tax time.

Who Needs to Make Quarterly Estimated Tax Payments?

You may need to make quarterly estimated payments if you earn income that is not from an employer and does not have taxes withheld. This includes income from freelance work, business earnings, rental properties, interest, dividends, or capital gains.

The IRS has a general rule to help you figure out if estimated payments are required. You’ll likely need to pay quarterly if both of the following apply:

✅ You expect to owe at least $1,000 in federal income tax for the 2025 tax year after subtracting any withholding and tax credits.

✅ You expect your withholding and credits to be less than the smaller of:

📝 Note: These rules apply only if your prior-year return covered a full 12-month period.

What Types of Taxpayers Usually Make Estimated Payments?

✅ Self-Employed Individuals — If you work for yourself and do not receive a paycheck with tax withholding, you likely need to pay estimated taxes.

✅ Small Business Owners — If you own a business or are part of a partnership, LLC, or S corporation, you may need to pay estimated taxes on your share of business income.

✅ Investors — If you earn dividend income or capital gains, this income is not usually taxed at the source. You may owe estimated taxes depending on the amount.

✅ Corporations — Corporations must make estimated tax payments if they expect to owe at least $500 in tax for the year.

What Types of Income May Require Estimated Tax Payments?

Estimated tax payments usually apply to income that does not have federal taxes withheld. This includes a wide range of income sources, such as:

✅ Self-employment income
✅ Capital gains from selling investments
✅ Dividend income
✅ Rental income
✅ Interest earnings
✅ Taxable alimony (from divorce agreements made before 2019)
✅ Prizes and awards
✅ Royalties

Most W-2 income is covered by employer withholding. But in some cases, even if you have W-2 income, you may still owe estimated taxes if your withholding is too low to cover your total tax liability for the year.

If this applies to you, you do not necessarily need to make separate estimated payments. Instead, you can ask your employer to increase your withholding by submitting a new Form W-4. This can help you avoid underpayment penalties without making quarterly payments on your own.

Who Is Exempt From Making Estimated Tax Payments?

Not everyone is required to make quarterly tax payments. You generally do not need to pay estimated taxes if your total expected tax bill for the year is less than $1,000 after subtracting any withholding and credits.

You are also exempt from estimated payments if all of the following apply:

✅ You had no tax liability in the previous year. This means your total tax was zero or you were not required to file a return.
✅ You were a U.S. citizen or resident alien for the entire year.
✅ Your previous tax year covered a full 12-month period.

If you meet all three of these conditions, you are not required to send estimated tax payments for the current year.

When Are Quarterly Estimated Tax Payments Due in 2025?

Estimated tax payments are due four times during the year. Each payment covers income earned in a specific period and must be submitted by a set deadline.

For the 2025 tax year, the quarterly due dates are:

Payment period (2025)	Due date
Jan 1 – Mar 31	Apr 15, 2025
Apr 1 – May 31	Jun 16, 2025 (moved to Monday because June 15 falls on a Sunday)
Jun 1 – Aug 31	Sep 15, 2025
Sep 1 – Dec 31	Jan 15, 2026

📝 Note: If a deadline falls on a weekend or federal holiday, the due date moves to the next business day. Make sure to plan ahead, as missing a deadline could result in interest or penalties.

What If My Business Uses a Fiscal Year Instead of a Calendar Year?

If your business operates on a fiscal year that does not begin on January 1, your estimated tax deadlines will be different. The IRS provides a separate schedule based on your fiscal year start date:

✅ First payment: 15th day of the 4th month of your fiscal year
✅ Second payment: 15th day of the 6th month
✅ Third payment: 15th day of the 9th month
✅ Fourth payment: 15th day of the first month after your fiscal year ends

📝 Note: If you file your income tax return by the last day of that first month and pay the full balance due with your return, you are not required to make the fourth estimated payment.

What Happens if You Don’t Pay Estimated Taxes on Time?

If you don’t pay your estimated tax payments on time, or don’t pay enough, the IRS will charge you with an underpayment penalty on top of the taxes that you owe. The amount penalized will depend on how much you owe and how long you haven’t paid.

The IRS typically charges interest at the federal short-term rate plus 3 percentage points.

There may also be a failure-to-pay penalty, which is 0.5 percent of the unpaid tax for each month it remains unpaid. This penalty can grow to a maximum of 25 percent. You or your tax professional can use Form 2210 to calculate the estimated penalty amount if needed.

How Can You Avoid a Penalty?

To avoid underpayment penalties, you generally need to pay:

✅ At least 90 percent of the tax you expect to owe for 2025, or
✅ 100 percent of your 2024 tax liability

If your adjusted gross income was over $150,000 in 2024, the threshold increases. You must pay either 90 percent of your 2025 tax or 110 percent of your 2024 tax to stay penalty-free.

How Will You Know if You Were Penalized?

The IRS will send you a notice if you are charged an underpayment penalty. The notice will explain how much you owe and how the penalty was calculated. Keep an eye out for any communication from the IRS after you file your return.

How to Pay Estimated Taxes

There are a few ways to pay your quarterly estimated taxes, whether you prefer mailing a physical check or using an online method.

Pay by Mail

To pay by mail, fill out Form 1040-ES and include it with a check or money order made out to the United States Treasury. Send both to the correct IRS address based on your state of residence. 

If You Live In	Mail Payment To
Alabama, Alaska, Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Kansas, Louisiana, Michigan, Mississippi, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, Wyoming	Internal Revenue ServiceP.O. Box 1300Charlotte, NC 28201-1300
Arkansas, Connecticut, Delaware, District of Columbia, Illinois, Indiana, Iowa, Kentucky, Maryland, Maine, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, Oklahoma, Rhode Island, Virginia, West Virginia, Vermont, Wisconsin	Internal Revenue ServiceP.O. Box 931100Louisville, KY 40293-1100
U.S. territory/foreign country or a non-resident	Internal Revenue Service P. O. Box 1303 Charlotte, NC 28201-1303 USA

Pay Online

You can also pay online by credit card or phone through your online IRS account, the IRS2Go app, or the IRS website.

How to Report Estimated Tax Payments When Filing

When you file your federal tax return, report all estimated tax payments on Form 1040, Line 26. This includes any overpayment from the prior year that you chose to apply toward your current-year taxes.

Wrapping It Up

Staying on top of estimated tax payments can help you avoid penalties and better manage your cash flow throughout the year. Whether you’re self-employed, a contractor, or have other non-W-2 income, it’s important to understand your payment obligations and plan ahead.

✅ Use the IRS payment option that works best for you
✅ Keep track of deadlines and payment records
✅ Adjust midyear if your income increases or decreases

If you’re unsure how much to pay, consider working with a tax professional.

📌 Looking for more tax tips and guides? Browse our other articles to stay informed year-round:

---

Disclaimer:

The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.

The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.

To access investment advisory services through Carry Advisors, you must be a client of Vibes on an eligible membership plan. For more information about Carry Advisors’ investment advisory services, please see our Form [ADV Part 2A] (https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=916200) brochure and [Form CRS] (https://reports.adviserinfo.sec.gov/crs/crs_323620.pdf) or through the SEC’s website at [www.adviserinfo.sec.gov] (http://www.adviserinfo.sec.gov/).