When Estimated Tax Payments Are Due
Estimated tax payment deadlines are set by the IRS and fall four times a year
Estimated tax payments are quarterly installments you send to the IRS if you owe taxes that won't be covered by withholding from a paycheck or other income source. The IRS sets four fixed deadlines each year, and missing them can result in penalties and interest charges even if you ultimately owe nothing.
The four payment dates are always the same calendar dates, though the day of the week changes year to year. If a deadline falls on a weekend or federal holiday, you can pay the next business day without penalty. The IRS does not extend these dates for personal reasons, but it does sometimes grant blanket extensions when disasters occur in specific regions.
You need to make estimated payments if you're self-employed, have investment income, receive rental income, or work as a contractor or freelancer. Employees with a second job or spouse who doesn't have withholding may also owe estimated taxes. The IRS expects you to pay enough throughout the year to avoid owing a large balance on April 15.
Key Takeaways
- Estimated tax payments are due on April 15, June 15, September 15, and January 15 of the following year, with the first payment covering income from January through March.
- You calculate what you owe using Form 1040-ES, which includes worksheets to estimate your annual income, deductions, and tax liability.
- Payments can be made online through IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS), by mail with a voucher, or by credit card through an approved processor.
- Underpayment penalties apply if you don't pay enough each quarter, even if you end up with a refund when you file your annual return.
- You can adjust your payment amounts between quarters if your income changes, and you're not required to make a fourth-quarter payment if you file your tax return and pay the balance by January 31.
The four payment dates and what income each one covers
The first estimated tax payment is due April 15 and covers income earned from January 1 through March 31. The second is due June 15 and covers April 1 through May 31. The third is due September 15 and covers June 1 through August 31. The fourth is due January 15 of the following year and covers September 1 through December 31.
If any of these dates falls on a Saturday or Sunday, the deadline moves to the following Monday. If the deadline falls on a federal holiday, it moves to the next business day. For example, if June 15 falls on a Saturday, you have until Monday, June 17 to pay without penalty. The IRS publishes the exact dates each year on its website and in Publication 505.
You do not have to make all four payments if your circumstances change. If you expect to owe less in the second half of the year, you can reduce your third and fourth payments. If you expect to owe nothing, you can stop making payments. However, if you underpay in early quarters and then try to catch up later, you may still owe penalties on the underpayment period.
How to calculate what you owe using Form 1040-ES
The IRS provides Form 1040-ES, which includes worksheets to help you estimate your tax liability for the year. You start by projecting your total income from all sources—self-employment, rental property, investments, and any other income. Then you subtract deductions you expect to claim, such as the standard deduction or itemized deductions, business expenses, and tax credits.
The form walks you through calculating your federal income tax, self-employment tax (if you're self-employed), and any other taxes you expect to owe. It then divides that total by four to determine your quarterly payment amount. If you expect your income to be uneven across quarters—for example, if you earn most of your income in the summer—you can pay different amounts each quarter instead of splitting evenly.
Many people use tax software or work with a tax professional to complete Form 1040-ES, especially if their income is complex. The IRS also provides a worksheet-based calculator on its website. If you're unsure whether you need to make estimated payments, the form includes a worksheet to help you determine that as well.
Where and how to send your payment
You have several options for paying estimated taxes. IRS Direct Pay is free and allows you to pay directly from your bank account through the IRS website. You enter your routing and account number, select the payment date and amount, and receive confirmation immediately. EFTPS (Electronic Federal Tax Payment System) is another free option that works similarly but requires you to enroll in advance.
You can also pay by credit or debit card through an approved payment processor, though the processor charges a fee (usually 1.5 to 2 percent of the payment). The IRS website lists the approved processors. If you prefer to pay by mail, you can print a payment voucher from Form 1040-ES and send it with a check to the IRS address listed on the form.
Whichever method you use, keep a record of your payment confirmation or receipt. The IRS matches payments to your Social Security number or Employer Identification Number (EIN), so make sure you use the correct number on your payment. If you pay online, save your confirmation number. If you pay by mail, keep a copy of the cancelled check or money order receipt.
What happens if you miss a deadline or underpay
If you miss an estimated tax payment deadline, the IRS charges a penalty for underpayment on the amount you should have paid, calculated from the due date until you pay or file your return. The penalty rate changes quarterly and is based on the federal short-term interest rate plus 3 percent. Even if you ultimately receive a refund when you file your annual return, you may still owe a penalty for underpaying during the year.
The IRS also charges interest on any taxes you owe after April 15. Interest accrues daily from the due date until you pay. If you owe both a penalty and interest, the interest is calculated on the combined amount. The longer you wait to pay, the more interest accumulates.
You can reduce or eliminate the underpayment penalty if you can show that you had reasonable cause for not paying enough. This is difficult to prove and usually requires circumstances like a sudden job loss, illness, or disaster. Most people who underpay simply owe the penalty along with interest. If you realize you've underpaid, paying as soon as possible stops the interest clock and may reduce the total penalty.
Adjusting your payments if your income changes
You are not locked into the payment amount you calculated at the beginning of the year. If your income increases or decreases, you can recalculate your estimated tax using Form 1040-ES and adjust your remaining quarterly payments. For example, if you had a strong first quarter and expect to earn much more than you originally projected, you should increase your second, third, and fourth payments to avoid underpayment penalties.
Conversely, if your income drops or you experience a loss, you can reduce your remaining payments. Some self-employed people recalculate after each quarter based on actual income rather than projections. This approach requires more work but can help you avoid overpaying or underpaying significantly.
If you make a large adjustment late in the year, you may be able to catch up by making a larger fourth-quarter payment. However, the penalty is still calculated based on what you should have paid in earlier quarters, so adjusting early is always better than adjusting late.
The fourth-quarter payment and filing your return
The fourth estimated tax payment is due January 15, but you have an alternative: you can skip the fourth payment if you file your annual tax return and pay any remaining balance by January 31. This gives you an extra two weeks to finalize your numbers and file. However, if you don't file by January 31 or don't pay the full balance owed, you'll owe penalties and interest on the unpaid amount.
Many people who are organized file their return by January 31 and skip the fourth payment. Others prefer to make the January 15 payment and then file their return later, which gives them more time to gather documents and work with a tax professional. Either approach is acceptable as long as you pay what you owe by the deadline.
If you overpaid estimated taxes during the year, you'll receive a refund when you file your return. The IRS does not pay interest on overpayments unless you request it, and most people simply apply the overpayment to next year's estimated taxes or receive it as a refund on their bank account.
State estimated tax payments may have different deadlines
Many states require estimated tax payments on their own schedule, which may or may not align with the federal deadlines. Some states use the same four dates as the IRS. Others use different dates or require only two or three payments per year. A few states do not require estimated tax payments at all, even if you owe state income tax.
If you live in a state with income tax, contact your state tax agency or check its website to learn the deadlines and payment methods. Some states allow you to pay online; others require mail or in-person payment. State penalties for underpayment are typically lower than federal penalties but still add up over time.
If you move to a different state during the year, you may owe estimated taxes to both states for the portion of the year you lived in each. Your state tax agency can tell you whether you need to make estimated payments and what the deadlines are.
Frequently Asked Questions
Do I have to make estimated tax payments if I'm self-employed?
You must make estimated tax payments if you expect to owe $1,000 or more in federal income tax after accounting for withholding and credits. Most self-employed people owe this amount, but the IRS provides a worksheet in Form 1040-ES to help you determine whether you do. If you're unsure, it's safer to make the payments than to skip them and face penalties.
What if I can't pay the full amount by the deadline?
Pay whatever you can by the deadline to reduce the penalty. The penalty is calculated on the underpaid amount, so paying even a partial amount reduces what you owe. You can also set up a payment plan with the IRS if you owe a large balance, though interest and penalties will continue to accrue until you pay in full.
Can I pay estimated taxes monthly instead of quarterly?
The IRS requires four payments per year on the set dates. You cannot make monthly payments and skip the quarterly deadlines. However, you can make payments more frequently than required—for example, paying monthly and then making a lump-sum payment by the quarterly deadline. This approach doesn't reduce penalties but can help you spread the cash flow.
What if I overpay my estimated taxes?
You'll receive a refund or credit when you file your annual return. You can request that the overpayment be refunded to your bank account, applied to next year's taxes, or split between the two. The IRS does not pay interest on overpayments unless you request it in writing, and most people simply take the refund or credit without interest.
Do I need to make estimated tax payments if I have a job and a side business?
If your employer withholds enough tax from your paycheck to cover your total tax liability (including the side business income), you may not need to make estimated payments. Use the Form 1040-ES worksheet to calculate whether you'll owe $1,000 or more after withholding. If you will, make estimated payments on the side business income.