Contract workers and anyone else unsure about estimated tax payments should reach out to The Silver Tax Group to speak to a professional. If you’re working a side hustle or freelance, paying quarterly taxes can help you avoid IRS self-employment penalties or interest charges when you file your tax return next year. Each state has its own rules and forms for estimated tax payments.

Form 8889 Guide: Reporting Your HSA Contributions

Otherwise, you could owe interest and penalties when you file your tax return. After you start paying estimated taxes, be sure to keep a separate record of the dates you paid them and how much you sent for each period. If you don’t keep accurate records, it can take you longer to prepare your income tax return, and you may miss one or more of the payments you made. If you pay estimated taxes, be sure to claim credit for them when you file your tax return.

Estimated taxes are due, regardless of whether you’re paid by direct deposit, check or digital payment services like PayPal, CashApp, Zelle or Venmo. Third party payment platforms are required to send you a 1099-K tax form if you made more than $2,500 on the platform in 2025. The estimated tax filing process can be complicated, but we’re here to simplify it for you. Here’s everything you need to know to calculate your taxes and file on time. Estimated tax payments are due quarterly throughout the year for U.S. taxpayers. The due dates are on or around April 15th, June 15th, September 15th, and January 15th of the following year.

Safe harbor rules can protect you from penalties if you meet certain payment thresholds based on your previous year’s tax liability.
Many factors can affect refund timing after the IRS receives a tax return.
This method is generally best for people on year 2 or more of earning income without taxes withheld—and whose income is fairly stable from year to year, as well as throughout a single year.
Ensure your estimated tax payments cover at least 90% of your current year’s tax liability.
If you realize you’ve underpaid, submit additional estimated tax payments as soon as possible to minimize penalties.
Estimated taxes are quarterly payments made to the IRS in order to cover income tax, self-employment tax, and any other relevant taxes that aren’t automatically withheld for certain types of workers.

Report taxable income; don’t file before receiving key documents

In most cases, to avoid a penalty, you need to make estimated tax payments if you expect to owe $1,000 or more in taxes for the year—over and above the amount withheld from your wages or other income. In some cases, though, the $1,000 trigger point doesn’t matter. If your previous year’s adjusted gross income was over $150,000, you will need to pay 110% of your previous year’s taxes as part of your estimated tax payments. If you answered “no” to all of these questions, you must make estimated tax payments using Form 1040-ES. To avoid a penalty, your total tax payments (estimated taxes plus withholding) during the year must satisfy one of the requirements we just covered. Failing to pay sufficient estimated taxes can result in penalties.

Are there any penalties for not paying estimated taxes?

If a business fails to make estimated payments, the IRS may assess underpayment penalties and interest on the owed amount. The longer the income tax remains unpaid, estimated taxes: how to determine what to pay and when the higher the estimated tax penalty will be and interest will accrue. This can also result in tax liens, wage garnishments, bank levies, and the seizure of assets.

Form 941: A Complete Guide for Employers

As a rule, the closer your relationship with the decedent, the lower the rate you’ll pay. Both the exemption you receive and the rate you’re charged may vary by your relationship to the deceased—more so than with the value of assets you are inheriting. An estate tax is assessed by the state where the decedent was living at the time of death. Any part of the estate that is bequeathed to a surviving spouse is not counted in the total amount and isn’t subject to estate tax. The right of spouses to leave any amount to each other is known as the unlimited marital deduction. As with regular taxes, missing the payment deadline is not like landing in the “GO TO JAIL” space, but while it doesn’t immediately spell disaster, there are consequences for it.

You calculate that you need to pay $10,000 in estimated taxes throughout the year, and you don’t make your first payment until June 15 (when the second estimate is due), so your first payment will be $5,000.
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.
This percentage is based on the federal short-term interest rate plus three percentage points.
Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills.
The fraudsters then deposit the check into their own bank account and steal the money intended for the original payee.
The penalty will depend on how much you owe and how long you have owed it to the IRS.

We have already reported that due to the low rate of return on net current assets in farming, the most cost-effective way a cereals producer could pay their expected tax burden would be to sell parcels of land. You can also opt to do it through a self-assessment tax return if you’re already registered and file tax returns anyway. This means £1,260 of your personal allowance can be transferred to your spouse or civil partner if they earn more than you. The annual personal savings allowance (PSA) means basic rate taxpayers can earn £1,000 of tax-free interest every tax year, after which they pay 20%. HM Revenue & Customs rules state that for every £2 you earn over £100,000 per annum, you lose £1 worth of your £12,570 tax-free personal allowance.

Learn when and how to pay estimated taxes on capital gains to avoid penalties and ensure compliance with tax regulations. Just like with regular taxes, a delay in your estimated tax payments may result in penalties, so it’s crucial to mark these dates on your calendar. If you end up overpaying your estimated taxes, you won’t be subject to any penalties. Instead, the IRS will eventually issue you a refund, lessening your tax burden down the line. With that said, you won’t have access to that money for some time, so it’s often preferable to be as accurate as possible and avoid overpaying.

To avoid penalties, taxpayers can use the annualized income installment method, which bases payments on actual income earned during each quarter. This method is particularly beneficial for those with irregular income, such as seasonal workers or individuals who receive substantial gains later in the year. Calculating the estimated tax amount for capital gains requires a clear projection of total taxable income, including wages, dividends, and other income sources. Once total income is estimated, identify the portion attributable to capital gains to determine the applicable tax rate. Anyone who earns income that isn’t taxed should pay quarterly estimated tax payments.

But by paying quarterly, you avoid penalties and shouldn’t owe at the end of the year. Investors who receive large dividend payments might also be required to pay quarterly taxes on those earnings, if they meet the $1,000 threshold and other requirements. Likewise, if you had significant lottery or other prize winnings, you may also be subject to paying estimated quarterly taxes. Obviously, not everyone is required to make estimated tax payments. Income you earn from freelancing, side jobs, contracted work or from your own business may not have taxes automatically withheld. If that’s the case for you, it’s a smart move to pay estimated taxes four times a year.

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