Estimated Tax Payments: Because the Government Always Gets Theirs
June 4, 2025
Hate April 15? You Haven’t Met Estimated Payments
If you dread Tax Day every year because you always owe, here’s the truth: it doesn’t have to be that way.
The IRS runs on a “pay-as-you-go” system. If you earn income that isn’t subject to automatic withholding—like self-employment, freelance income, rental profits, or K-1s—you’re expected to make quarterly estimated tax payments throughout the year. These aren’t optional. They’re advance payments toward your final tax bill.
Let’s take a look at Estimated Tax Payments for Individuals:
What Counts as Income That Triggers Estimated Payments?
- Self-employed business income (even part-time)
- Rental income
- Interest and dividends
- Capital gains, stock sales, and crypto profits
- K-1 income from partnerships or S Corps
- Side hustles and freelance gigs
If you don’t have taxes withheld at the source (like you do with a W-2), you’re on the hook to estimate and pay on your own.
Why It Matters:
- Estimated payments help you avoid a massive balance due in April.
- They reduce or eliminate IRS penalties for underpayment.
- They help you plan your cash flow more intentionally throughout the year.
Failing to make them can trigger penalties, even if you file your return on time. The IRS doesn’t care if you meant to pay—they expect consistent deposits, not catch-up checks.
2025 Estimated Tax Due Dates:
Mark these on your calendar:
✅ April 15, 2025 – First quarter
✅ June 16, 2025 – Second quarter (15th falls on a Sunday)
✅ September 15, 2025 – Third quarter
✅ January 15, 2026 – Fourth quarter
If the 15th falls on a weekend or holiday, the due date moves to the next business day.
Do You Really Have to Pay?
If you expect to owe at least $1,000 in tax this year after subtracting any withholdings and refundable credits, then yes—you’re required to make estimated payments.
Also: don’t forget state tax obligations. If you live in one of the 41 states that collect income tax, check whether you’re expected to make quarterly payments there too. The rules vary.
Final Thought:
If you’re done being caught off guard every April, this is your solution. Paying estimated taxes is a smart, strategic move—and yes, it can feel empowering to send money to the IRS and not panic about it.
Want help calculating what to pay? See our guide on How to Estimate Your Tax Payment
