Estimated Tax 2025: 4 Key Deadlines You Can’t Afford to Miss
For individuals and businesses with income not subject to withholding—such as self-employment earnings, interest, dividends, or rental income—the IRS requires the payment of estimated taxes throughout the year. This "pay-as-you-go" system ensures that taxpayers contribute to their annual tax liability periodically, rather than in a lump sum at year's end. Failing to withhold or pay sufficient tax during the year can lead to penalties. At Visibility CFO & Tax Advisors, we are here to help you avoid the shock!
Quarterly Estimated Tax Payment Deadlines
The tax year is divided into four payment periods, each with a specific due date. For 2025 those dates are:
1st Payment: April 15, 2025
2nd Payment: June 16, 2025*
3rd Payment: September 15, 2025
4th Payment: January 15, 2026
*If a due date falls on a weekend or legal holiday, the payment is due the next business day.
Calculating Your Estimated Tax Payments
There are a couple of ways to determine your estimated tax. The easiest may be to reach out to your Visibility Team for help. Another option is to use the IRS provided Form 1040-ES, which has a worksheet to help calculate your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.
It's advisable to base your estimates on the previous year's income, deductions, and credits- adjusting for any anticipated changes. Regularly reviewing and updating your estimates can help avoid underpayment penalties- so if you want to update your withholding or understand the accuracy of your estimated payments better get in touch with us and we will guide you through that process.
Submitting Your Estimated Tax Payments
The IRS offers several methods to submit estimated tax payments: Here are some examples, and for more information visit here.
Online: Use IRS Direct Pay to transfer funds directly from your bank account.
Electronic Federal Tax Payment System (EFTPS): A free service for paying federal taxes online.
By Mail: Send a check or money order with Form 1040-ES to the address specified for your state.
IRS2Go App: Make payments via the IRS's mobile application.
It is important to make sure your payments are submitted by each due date to avoid penalties. We also recommend you keep record of all payment confirmation information.
Penalties for Underpayment or Late Payment
Failing to pay enough tax through withholding or estimated payments can result in an underpayment penalty. Generally, the penalty applies if you owe at least $1,000 in tax after subtracting withholding and refundable credits, and if you paid less than 90% of the current year's( tax or 100% of the prior year's tax, whichever is smaller.)
The penalty is calculated based on the amount of underpayment and the period it remained unpaid. To determine if you owe a penalty, use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts.
How We Can Help
Accurately calculating your payments, submitting them on time, and staying informed about potential penalties is critical to avoid unnecessary penalty charges, and nasty surprises at tax time! Don’t wait until it’s Tax Season to know if you are where you need to be- contact your Visibility Team today, and let us take the headache out of tax compliance.
