Federal income taxes are due for most Americans on April 15, 2025.
But suppose you have income from self-employment, gig economy work, investments or retirement plan withdrawals. In that case, you need to know about another tax deadline on April 15: first quarter estimated tax payments.
If you don’t have income taxes automatically withheld from some or all of your pay, you may need to pay quarterly taxes to avoid penalties. Keep reading to find out all you need to know about paying quarterly taxes.
Who Has to Pay Quarterly Taxes by the April 15 Deadline?
The IRS works on a pay-as-you-go system rather than requiring a single payment from taxpayers at the end of the year. In other words, you’re expected to pay taxes as you earn.
If you’re an employee, your employer generally withholds taxes from each of your paychecks and makes deposits to the IRS on your behalf. However, taxes aren’t withheld automatically if you earn other types of income.
“Self-employment income, interest, dividends, capital gains, unemployment and Social Security are all sources of income that generally don’t have withholding,” says Melody Thornton, a certified public accountant and partner at Fitzgerald & Company in San Diego.
If you don’t pay taxes on this income throughout the year, you could end up with a big bill when you file your return. And you could end up with an underpayment penalty — even if you pay the amount due in full by the annual filing deadline.
[Read: Pros and Cons of Waiting Until the Last Minute to File Your Taxes]
When Quarterly Taxes Are Due
Individual quarterly taxes are due on the 15th day of the fourth, sixth, and ninth months of a tax year and the 15th day of the first month of the following year. If the 15th falls on a holiday or weekend, the due date is pushed to the next business day.
The 2025 estimated tax due dates are as follows:
— Payment one for income earned from Jan. 1 through March 31 is due on April 15, 2025.
— Payment two for income earned from April 1 through May 31 is due on June 16, 2025 (June 15 falls on a Sunday).
— Payment three for income earned from June 1 to Aug. 31 is due on Sept 15, 2025.
— Payment four for income earned Sept. 1 through Dec. 31 is due on Jan. 15, 2026.
“The IRS expects that anyone who will owe $1,000 on their tax return because previous tax payments and withholding were insufficient should make estimated tax payments,” says Mary Kay Foss, a CPA in Carlsbad, California.
How Much Do You Have to Pay by the April 15 Deadline?
You can usually avoid the underpayment penalty if you owe less than $1,000 in tax after subtracting your withholding and refundable credits at the end of the year.
You can also avoid it if you paid the lesser of at least 90% of the taxes you owe for the current year or 100% of the taxes you owed for the prior year (or 110% of those taxes if your adjusted gross income was $150,000 or more), through withholding and estimated taxes.
Use the worksheet in the instructions for IRS Form 1040-ES to estimate how much you need to pay in quarterly taxes. Because of the way the IRS calculates penalties, these estimated tax payments should be close to what you owe — but they don’t need to be precise.
“If income is going up from year to year, then using the prior year’s safe harbor is the easiest way to determine the estimates required,” Thornton says. “However, in years when paying 90% of the current tax year is less, then estimates can be calculated each quarter.”
If you have self-employment income, remember that your tax liability also includes self-employment tax.
“People who are self-employed not only pay tax on the net profit from their businesses, they also pay self-employment tax,” Foss says.
“This is a Social Security and Medicare tax — the self-employed person is both the employer and the employee, so the rate they pay is twice what is withheld from someone working for someone else. Without a withholding source, self-employed people will need to make estimated tax payments,” she says.
[Read: How to File Taxes When You’re Self-Employed]
You can’t avoid a penalty just by making extra payments at the end of the year. If you don’t pay enough each quarter, you may be charged a penalty even if you’re due a refund when you file your annual income tax return.
“The underpayment of estimates penalty is calculated like interest and the amount charged is computed on the underpaid tax at the interest rate set by the IRS for that period,” Thornton says. “The IRS changes interest rates as market interest rates go up and down.”
For more information, see IRS Publication 505 Tax Withholding and Estimated Tax.
How to Pay Quarterly Taxes by April 15
After you calculate the amount you owe, you can fill out an estimated tax payment voucher from IRS Form 1040-ES and mail it with a check to the address listed for your state. Note that this is a different address from the one to which you send your federal return.
You can also make your quarterly payments online — see the IRS Make a Payment page for options.
Further, check with your state department of revenue to find out whether you need to pay quarterly income taxes to your state.
“Most states with an income tax expect taxes to be prepaid in a similar way to the federal rules,” Foss says. “States will also assess penalties when prepayments are inadequate. They may have their own threshold similar to the $1,000 rule for the IRS.”
Is There Another Way to Avoid a Penalty?
Making quarterly tax payments isn’t the only way to avoid the penalty. If you have income from another job and you have taxes withheld — maybe you’re a full-time employee but also do some freelance work — you can have more money withheld from your pay as an employee to help cover the extra income.
“If you have the option to increase withholding to cover estimated taxes, that is preferable,” Thornton says.
Or, if you’re married and filing jointly, your spouse can have extra money withheld from their pay to cover the extra taxes.
[Read: Married Couples: Is It Better to File Taxes Jointly or Separately?]
“If someone is working for a company that withholds taxes and they also have a side gig operating at a profit, it will be easier for them to increase withholding from the employer instead of making estimated tax payments,” Foss says. “They would not need to notify the employer as to why they want the tax (withholding) to be increased.”
How to Adjust Your Withholding
To adjust your withholding, submit a new Form W-4 to your employer requesting they withhold extra money for taxes each pay period.
“The reason withholding is better is that all withholding is treated as being paid equally throughout the year, even if it is increased late in the year. Estimated tax payments are credited when the payment is received. Especially if someone is behind on estimates for the year, adjusting withholding is a great option,” Thornton says.
In addition, you may be able to request withholding from certain kinds of income, such as unemployment benefits or IRA withdrawals. If you’re receiving unemployment benefits, you can ask to have taxes withheld from your payments when you apply for benefits, or you can file IRS Form W-4V, Voluntary Withholding Request with your state unemployment office.
Keep in mind that you can request only 10% of each payment be withheld from your unemployment benefits for federal income taxes. You can also use this form to request withholding from Social Security benefits.
[Read: Tax Prep Checklist: Collect These Forms Before You File]
Another option is to request to have more money withheld for taxes when you take IRA withdrawals, which can be a good option for retirees who are paying taxes on tax-deferred retirement income.
Foss says that withholding from IRA withdrawals is voluntary but if you decide to elect federal withholding, the minimum rate is 10% (there is no maximum rate).
“People who are both self-employed and making IRA withdrawals could try to pay all of their taxes using tax withholding from retirement distributions,” Foss says. Contact your IRA administrator to request the withholding amount when you take withdrawals.
“I have clients who simply take an IRA distribution in December and allocate the entire amount to taxes being withheld,” says Morris Armstrong, an enrolled agent in Cheshire, Connecticut. “That works because taxes withheld are deemed to be distributed evenly throughout the year.”
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Surprise: There’s Another Tax Deadline on April 15 originally appeared on usnews.com
Update 04/07/25: This story was published at an earlier date and has been updated with new information.
