U.S. Estimated Tax FAQs

U.S. Estimated Tax FAQs

When are quarterly estimated tax payments due?
 
Answer:
For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you don't pay enough tax by the due date of each payment period, you may be charged a penalty even if you're due a refund when you file your income tax return at the end of the year.

You may send estimated tax payments with Form 1040-ES by mail, pay online, by phone or from your mobile device using the IRS2Go app. Visit Payments to view all payment options.

When to Pay Estimated Tax
Payment Period Due Date
January 1 – March 31 April 15
April 1 – May 31 June 15
June 1 – August 31 September 15
September 1 – December 31 January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax
Fiscal Year Taxpayers If your tax year doesn't begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505
Farmers and Fishermen See Chapter 2 of Publication 505
Note: If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

 

Additional Information:
Form 1040-ES, Estimated Tax for Individuals (PDF)
Subcategory:
Individuals
Category:
Estimated Tax
If I anticipate a sizable capital gain on the sale of an investment during the year, do I need to make a quarterly estimated tax payment during the tax year?
 
Answer:
Generally, you must make estimated tax payments for the current tax year if both of the following apply:

You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits, and
You expect your withholding and refundable credits to be less than the smaller of:
90% of the tax to be shown on your current year's tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year’s tax return must cover all 12 months.)  
There are special rules for:

Farmers and fishermen
Certain household employers
Certain higher income taxpayers
Nonresident aliens
You may be able to annualize your income and make an estimated tax payment or an increased estimated tax payment for the quarter in which you realize the capital gain. You would have to file Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts with your tax return to show us that your uneven estimated payments match up with the income that you received unevenly over the course of the year.

If you're making estimated tax payments and have federal income tax withholding, you can increase your quarterly estimated tax payments or increase your federal income tax withholding to cover the tax liability. If you have the proper amount withheld, you may not need to make estimated tax payments and may not have to file Form 2210 with your tax return as you would if you only increased the remaining estimated tax payments.

Note: "Qualified Dividends and Capital Gains Worksheet," available in Publication 505, Tax Withholding and Estimated Tax, can help you estimate the additional tax liability. It's important to remember that the tax rate on net capital gains is generally lower than the tax rate on ordinary income.

Additional Information:
Tax Topic 306 - Penalty for Underpayment of Estimated Tax
Form 1040-ES, Estimated Tax for Individuals (PDF)
Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals (PDF)
Subcategory:
Large Gains, Lump-Sum Distributions, etc.
Category:
Estimated Tax
How do I know if I have to file quarterly individual estimated tax payments?
 
Answer:
Generally, you must make estimated tax payments for the current tax year if both of the following apply:

You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
You expect your withholding and refundable credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
There are special rules for:

Farmers and fishermen
Certain household employers
Certain higher income taxpayers
Nonresident aliens
Additional Information:
Publication 505, Tax Withholding and Estimated Tax
Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals (PDF)
Form 1040-ES, Estimated Tax for Individuals (PDF)
Subcategory:
Individuals
Category:
Estimated Tax
When I file my personal tax return, how do I report the estimated payments I made during the year?
 
Answer:
Report all your estimated tax payments on Form 1040, line 26. Also include any overpayment that you elected to credit from your prior year tax return.
 

Additional Information:
Publication 505, Tax Withholding and Estimated Tax
Instructions for Form 1040 (and Form 1040-SR)
Subcategory:
Individuals
Category:
Estimated Tax
Are there any special provisions related to estimated tax payments for farmers and fishermen?
 
Answer:
Calendar year farmers and fishermen.  If you're a calendar year taxpayer and at least two-thirds of your gross income for 2022 or 2023 is from farming or fishing, you have only one payment due date for your 2023 estimated tax, January 16, 2024. The due dates for the first three payment periods don't apply to you. See Farmers and Fishermen in Publication 505, Tax Withholding and Estimated Tax.

You can figure out the penalty for failure to pay estimated taxes, which includes failing to pay enough estimated taxes, for 2023, based on the difference between the amount of 2023 withholding plus estimated tax you paid by January 16, 2024, and the smaller of:

66 ⅔% (rather than 90%) of your 2023 tax, or
100% of the tax shown on your 2022 return.
You won't owe an estimated tax penalty if the tax shown on your 2023 return, minus your 2023 withholding, is less than $1,000.

If you're a calendar year taxpayer and you file your 2023 Form 1040 by March 1, 2024, you don't need to make an estimated tax payment if you pay all the tax you owe at that time.

Fiscal year farmers and fishermen. If you're a farmer or fisherman, but your tax year doesn't start on January 1, you can either:

Pay all your estimated tax by the 15th day after the end of your tax year, or
File your return and pay all the tax you owe by the 1st day of the 3rd month after the end of your tax year.
Note: If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

Additional Information:
Tax Topic 416 - Farming and Fishing Income
Form 1040-ES, Estimated Tax for Individuals
Subcategory:
Farmers & Fishermen
Category:
Estimated Tax
Should self-employment taxes be paid quarterly or yearly?
 
Answer:
Generally, if you determine you need to make estimated tax payments for estimated income tax and estimated self-employment tax, you can make quarterly estimated tax payments or pay all of the amount due on the first quarterly payment due date.

Special rules apply to farmers and fishermen. Farmers and fishermen make one required payment or pay in full with their tax return when filed by a certain date.

Additional Information:
Form 1040-ES, Estimated Tax for Individuals (PDF)
Publication 334, Tax Guide for Small Business
Publication 505, Tax Withholding and Estimated Tax
Subcategory:
Individuals
Category:
Estimated Tax
How do partnerships file and pay quarterly estimated tax payments?
 
Answer:
Partnerships file Form 1065, U.S. Return of Partnership Income to report income and expenses.
A partnership doesn't pay tax on its income, instead, it "passes through" any profits or losses to its partners. Generally, the partnership must prepare and give partners a copy of Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc,PDF or Schedule K-3 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc. - InternationalPDF.
The partners report the information from the K-1 or K-3 on their own returns and pay any taxes due, including estimated taxes.
How Partners Pay Estimated Tax

Because partners aren't employees of the partnership, partnerships don't withhold tax from their distributions to pay the partners' income and self-employment taxes shown on their Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors. The partners may need to pay estimated tax payments using Form 1040-ES, Estimated Tax for Individuals.

As a partner, you can pay the estimated tax by:

Crediting an overpayment on your 2022 return to your 2023 estimated tax
Mailing your payment (check or money order) with a payment voucher from Form 1040-ES
Using Your Online Account
Using Direct Pay
Using EFTPS: The Electronic Federal Tax Payment System
Requesting an electronic funds withdrawal (EFW) if you're filing Form 1040 or Form 1040-SR electronically
Downloading and using the IRS2GO application on your mobile device
Using a credit card, debit card, or digital wallet
Paying with cash
See Payments for more information.

 

Additional Information:
Publication 505, Tax Withholding and Estimated Tax
Instructions for Form 1065, U.S. Return of Partnership Income
Am I Required to Make Estimated Tax Payments?
Subcategory:
Businesses
Category:
Estimated Tax
Is an S corporation required to pay quarterly estimated tax?
 
Answer:
Sometimes, an S corporation must make estimated tax payments.

Generally, an S corporation must make installment payments of estimated tax for the following taxes if the total of these taxes is $500 or more:

Tax on built-in gains,
Excess net passive-income tax,
Investment credit recapture tax.
Additional Information:
Publication 542, Corporations, see topic Filing and Paying Income Taxes
Instructions for Form 1120-S, U.S. Income Tax Return for an S Corporation, see topic Estimated Tax Payments
Subcategory:
Businesses
Category:
Estimated Tax
What is meant by "no tax liability" in the exceptions to the estimated tax penalty?
 
Answer:
You had no tax liability for the prior year if your total tax was zero or you didn't have to file an income tax return.

Your total tax was zero if the line labeled "total tax" on Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S Tax Return for Seniors was zero.

You may not have had to file an income tax return for the prior tax year if your gross income was below a certain threshold. See Who Must File in Publication 501, Dependents, Standard Deduction and Filing Information, for information on filing requirements for most taxpayers.

For this exception to apply, two additional requirements must be met:

Your prior tax year was a taxable year of 12 months.
You were a citizen or resident of the United States throughout your prior tax year.
Additional Information:
Penalties
Form 1040-ES, Estimated Tax for Individuals (PDF)
Subcategory:
Penalty Questions
Category:
Estimated Tax