Don't Mess With Taxes

April 15 is double Tax Day for those of us who must pay estimated taxes.

It’s the end of the prior tax year, with returns (and payment) due for those earnings.

It’s also the start of tax filing (and paying) for this year. The payment for money made, but not subject to withholding, in the first quarter of 2026 is due on April 15.

Extra payments for certain income: The U.S. tax system is pay as earn. For the most part, that's taken care via tax withholding from employees’ paychecks.

But even if you have a job where income (federal and state, if applicable) tax is withheld, there are some instances where taxable income is not subject to withholding.

This could be earnings from gig work or other self-employment endeavors; investment/capital gains payouts; prize or gambling winnings; or even Social Security and other pension benefits.

If you get any of this type of income, you must cover the due tax yourself, and in a timely, pay as you go fashion.

This typically is accomplished by making estimated tax payments.

Estimated tax timing: The first estimated tax deadline is the April 15, or later date if that falls on a legal holiday or weekend day.

The rest of this year's estimated taxes are due on the regular schedule shown in the table below.

   
Although the payments are referred to as quarterly estimated taxes, that simply means four of them. The estimated tax earnings periods and tax-due time frames don't fall along what we usually think of when we divide the calendar into quarters.

The Internal Revenue Service prefers that you guesstimate how much money subject to estimated tax you'll get during the full tax year, divide that total by four, and send those equal amounts on the four due dates.

However, the four equal installments method isn't required. In fact, the annualized income option is a good move for some to use in calculating estimated tax payments for people whose earnings not subject to withholding vary throughout the year. This means you pay the amount of estimated tax on the actual amount of earnings you made during the payment quarter.

True, this variable estimated tax payment method requires more record keeping and calculations, but it could help with cash flow. My post on annualized income estimated tax payments has more on this choice.

Ways to pay: Now that you know you must pay estimated taxes, and when to do so, here are the ways that the IRS will gladly take your money.

If you must make the first 2025 tax year 1040-ES payment next week, you have several payment options.

Paying electronically is the fastest and easiest way to meet your estimated tax payment deadline. Those options include —

• IRS Direct Pay. This option allows taxpayers to schedule a no-cost transfer directly from a checking or savings account in advance of the Jan. 16 deadline.
• IRS Online Account. This option allows taxpayers to view their payment history, pending or recent payments and other tax information. If you don't have an existing IRS username or an ID.me account, have your photo identification ready. More information about identity verification is available on the IRS.gov taxpayer account sign-in page.
• Electronic Filing Tax Payment System, or EFTPS. EFTPS is a free system which offers selections such as scheduling payments a year in advance, paying estimated tax payments and tracking and changing scheduled payments. However, you must have created an account before you can use it.
• Debit or credit card or digital wallet. This is fast, easy, and familiar to most of us. The two vendors the IRS has approved for such payments are Pay1040 and ACI Payments, Inc. Note, however, that the card processors (not the IRS) charge a fee for the service.
• IRS2Go. The IRS' mobile app gives you access to Direct Pay or credit/debit card payment options.

Using these electronic payment options ensures that a payment gets credited promptly. More information on other payment options is available at IRS.gov/payments.

If you're still at least a bit old-school, you can pay by phone by calling toll-free one of the IRS-approved debit or credit card service providers. To make a Pay1040 phone payment call 1-888-PAY-1040 (1-888-729-1040). Phone payment via ACI Payments, Inc. is at 1-800-2PAY-TAX (1-800-272-9829). As they do with online payments, each vendor charges a fee that varies by provider, card type, and payment amount.

Also, if you've signed up for EFTPS and want to pay by phone rather than using the website or don't have online access, call the system's toll-free tax payment number (800) 555-3453. It's available 24 hours a day, 7 days a week.

Checks still accepted: For those who are truly and totally old-school, you still snail mail the IRS a paper check or money order. I've done this when I didn't schedule a payment for whatever reason. OK, the reason was I was slow in transferring money to my checking account to pay my tax bill.

In that case, mailing your tax payment has an advantage. You meet your estimated tax obligation by simply getting the payment in the mail in time for the U.S. Postal Service to postmark it by the due date. Just like when sending in your annual tax return, the postmark counts as timely filing.

The day or so it takes the voucher and check to get to the IRS should give your bank time to clear the transfer so that your check won't bounce.

If you do decide to mail your estimated tax payment, download the estimated tax package and include the appropriate payment voucher with your payment. Below is the voucher for the first 2025 tax year payment.

See more tax forms and more about them at Tax Forms 2024 and Tax Forms 2025.

Make your check or money order payable to "United States Treasury," not the IRS. Write "2025 Form 1040-ES" and your Social Security number on your check or money order. If you are filing a joint estimated tax payment voucher, enter the tax identification number that you'll enter first on your joint return.

Enclose, but do not staple or attach your payment with the estimated tax payment voucher. And check the mailing addresses, based by your state of residence, at the back of the 1040-ES form to find the correct address to which to mail your payment.

Yeah, the IRS' check policies are pretty precise. You can see other IRS check writing rules in this post.

Penalties for not paying ES: If you're thinking of ignoring estimated taxes, think again.

Generally, if you owe tax of $1,000 or more when you file your annual tax return, you could face a penalty for underpaying your taxes.

And if that money was from sources not subject to withholding, you also could face late-payment fines for not remitting it during the proper estimated tax quarters.

If you have a paycheck paying job in addition to your side earnings, you could avoid estimated tax payments by upping your paycheck withholding so that it's enough to cover all the money you're making, on the job and from other sources.

More time for disaster area taxpayers: Finally, a few estimated tax payers get a reprieve. Because they live in areas that sustained damage from major natural disasters, they get more time to file their 2024 tax returns as well as make 2025 estimated tax payments.

That's the case for affected taxpayers in 12 states. They are in Alabama, Alaska, California, Florida, Georgia, Kentucky, New Mexico, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia. My earlier post on this year’s delayed Tax Day has specifics on these taxpayers’ deadlines.

Whatever your estimated tax deadline, just make sure you meet it, and pay the appropriate amount. If you don't, you could be in for a costly surprise on Tax Day 2026.

You also might find these other estimated tax posts of interest:

• A quick estimated tax Q&A
• Ways to pay estimated taxes
• The scoop on estimated taxes
• Estimated taxes: Why, when, and how to pay them
• When to consider annualized income estimated tax payments

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