What Are the Quarterly Dates for Estimated Taxes?

When individuals receive income not subject to tax withholding, such as earnings from self-employment or investments, they often need to make estimated tax payments to the Internal Revenue Service (IRS) throughout the year. This system ensures taxpayers meet their obligations as income is earned, rather than facing a large tax bill at year-end. Understanding the structure and timing of these payments is important for effective financial planning and compliance with tax regulations. Properly managing these periodic contributions helps in avoiding potential penalties.

Understanding Estimated Tax Quarterly Dates

Estimated taxes are the method by which individuals pay tax on income not subject to automatic withholding, such as earnings from self-employment, interest, dividends, rental income, or capital gains. This pay-as-you-go system requires taxpayers to remit payments periodically throughout the year as they earn income. Unlike traditional employment where taxes are deducted from each paycheck, individuals with other income sources are responsible for calculating and submitting their own tax liabilities.

The IRS has established specific quarterly due dates for these payments for individuals, which do not align perfectly with calendar quarters. For income earned from January 1 to March 31, the first quarter payment is due on April 15. The second quarter covers income earned from April 1 to May 31, with the payment due date on June 15. Income received from June 1 to August 31 comprises the third quarter, and its payment is due on September 15. The final quarterly period spans from September 1 to December 31, with the payment due on January 15 of the following calendar year.

If any of these due dates fall on a Saturday, Sunday, or legal holiday, the deadline shifts to the next business day. Taxpayers can also choose to make payments more frequently than quarterly, as long as they meet the required amount by the end of each quarter.

Determining Your Estimated Tax Obligation

Individuals are generally required to make estimated tax payments if they expect to owe at least $1,000 in tax for the current year, after subtracting any withholding and refundable credits. Common income sources that necessitate estimated payments include self-employment earnings, which encompasses income from freelancing or gig economy work, as well as significant amounts of interest, dividends, or rental income.

The IRS provides “safe harbor” rules that can help taxpayers avoid underpayment penalties. An individual can generally avoid a penalty if they pay at least 90% of their current year’s tax liability through withholding and estimated payments. Alternatively, paying 100% of the tax shown on the prior year’s tax return also satisfies the safe harbor requirement, provided the prior year covered a full 12 months. For higher-income taxpayers, specifically those whose adjusted gross income (AGI) exceeded $150,000 in the prior year (or $75,000 if married filing separately), the safe harbor rule requires paying at least 110% of the prior year’s tax liability. Failing to pay enough estimated tax throughout the year can result in an underpayment penalty.

How to Pay Estimated Taxes

Online payment options offer speed and flexibility, allowing taxpayers to make payments directly from their bank accounts. The IRS Direct Pay system is a straightforward way to make payments without prior registration, enabling taxpayers to schedule payments up to 365 days in advance.

Another robust online option is the Electronic Federal Tax Payment System (EFTPS), which requires enrollment but allows taxpayers to schedule payments up to a year in advance and manage their payment history.

Payments can also be made by mail using payment vouchers from Form 1040-ES, Estimated Tax for Individuals, accompanying a check or money order. Additionally, taxpayers can make payments by phone through a payment processor, though processing fees may apply. Many tax software programs and tax professionals can also facilitate estimated tax payments, streamlining the process for their users and clients.