What Is Form 1040-ES and Who Needs to File It?

Form 1040-ES, Estimated Tax for Individuals, is a document used by taxpayers to pay taxes on income that is not subject to withholding. This method is for paying tax as you earn it, covering liabilities such as income tax and self-employment taxes. It is commonly used for earnings from self-employment, interest, dividends, rent, and other income sources where tax is not withheld automatically.

This pay-as-you-go system is designed to mirror the process used for employees whose taxes are withheld from each paycheck. Failing to pay enough tax through this method or through withholding can result in a penalty for underpayment. The form itself provides a worksheet to calculate the amount owed and includes payment vouchers to send with each installment.

Who Must Pay Estimated Taxes

You must pay estimated taxes if you expect to owe at least $1,000 in tax for 2025 after subtracting any withholding and refundable credits. A second condition must also be met related to how much of your tax liability is covered. You are required to pay estimated taxes if you expect your withholding and refundable credits to be less than the smaller of two amounts: 90% of the tax you expect to owe for 2025, or 100% of the tax shown on your 2024 return. Your 2024 tax return must have covered a full 12-month period for this rule to apply.

For higher-income taxpayers, the rules are slightly different. If your adjusted gross income (AGI) for 2024 was more than $150,000, or $75,000 if your filing status is married filing separately, you must pay the smaller of 90% of your expected 2025 tax or 110% of your 2024 tax liability. This special rule does not apply to farmers or fishermen.

Common scenarios for needing to file Form 1040-ES include a freelance graphic designer, a retiree receiving pension distributions without voluntary withholding, or an investor who realizes a significant capital gain. Individuals working as independent contractors, sole proprietors, or partners in a business are also typical filers. If you had no tax liability for the prior year, were a U.S. citizen or resident for the entire year, and the prior tax year covered 12 months, you are not required to pay estimated tax.

Calculating Your Estimated Tax Payment

To calculate your estimated tax, you must project your expected adjusted gross income (AGI) for the entire year. You will also need to determine your planned deductions and identify any tax credits you expect to claim. The official 2025 Form 1040-ES, available on the IRS website, contains the “2025 Estimated Tax Worksheet” which guides you through the calculation.

The worksheet starts with your expected AGI. From there, you subtract your anticipated deductions to arrive at your estimated taxable income. You then apply the appropriate tax rates based on your filing status to this income to figure your projected income tax. The worksheet also prompts you to add other taxes, such as self-employment tax, and then subtract any tax credits you are eligible for.

The worksheet helps you figure the minimum amount you must pay through estimates to avoid a penalty. This total required payment is then divided by four to determine the amount of each quarterly installment. Once you have calculated the quarterly payment amount, you transfer this figure to one of the detachable payment vouchers at the bottom of Form 1040-ES.

For those whose income is not received evenly throughout the year, the annualized income method offers an alternative. This method, detailed in IRS Publication 505, allows you to adjust your payment amounts for each period based on the income actually earned in that period. This can be useful for seasonal business owners or those with fluctuating income streams.

Payment Submission Methods and Deadlines

You must submit the payment by the established deadlines. For the 2025 tax year, payments are due by:

• April 15 for income earned January 1 through March 31
• June 16 for income earned April 1 through May 31
• September 15 for income earned June 1 through August 31
• January 15, 2026, for income earned September 1 through December 31

If a due date falls on a weekend or holiday, the payment is due the next business day.

One method for submission is to mail a check or money order with the completed payment voucher. The mailing address you use depends on your geographic location:

• For residents of Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Tennessee, and Texas: Internal Revenue Service, P.O. Box 1300, Charlotte, NC 28201-1300.
• For residents of Arkansas, Connecticut, Delaware, District of Columbia, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, Oklahoma, Rhode Island, Vermont, Virginia, West Virginia, and Wisconsin: Internal Revenue Service, P.O. Box 931100, Louisville, KY 40293-1100.
• For residents of Alaska, California, Colorado, Hawaii, Idaho, Kansas, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Utah, Washington, or Wyoming: Internal Revenue Service, P.O. Box 802502, Cincinnati, OH 45280-2502.

The IRS also offers several electronic payment options. You can pay directly from a bank account for free using IRS Direct Pay. Another option is the Electronic Federal Tax Payment System (EFTPS), a free online service provided by the Treasury Department that allows for scheduled payments. Both of these methods provide an electronic record of your payment and can be more convenient than mailing a check.

You can also choose to pay using a debit card, credit card, or a digital wallet through one of the IRS’s third-party payment processors. While this method offers flexibility, the processing companies charge a fee for this service. For instance, Pay1040 charges a fee of $2.15 for debit card transactions and 1.75% of the payment amount for credit cards. ACI Payments, Inc. has a fee of $2.10 for debit cards and 1.85% for credit cards. Both processors apply a minimum fee of $2.50 for credit card transactions.