Do You Need to Make Estimated Tax Payments This Year?
Mildred Dillon CPA 
Many people get caught off guard by the requirement to make estimated tax payments - especially as an employee. Get the facts and a free resource!
DISCLAIMER This post is not intended to be tax or legal advice, but rather to provide information for educational purposes only.. If you are unsure about your liability or requirements, consult your tax advisor or visit my services page so we can have a consultation to discuss.
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Do You Need to Make Estimated Tax Payments This Year?
Many business owners get caught off guard by estimated taxes—especially after a profitable year or a change in how they get paid.
Here’s a quick overview to help you figure out if this applies to you—and what to do next.
1. What are estimated tax payments?
Estimated taxes are quarterly payments the IRS expects from people who don’t have enough tax withheld from their income. That includes business owners, freelancers, independent contractors, and even W-2 employees with a side income.
If you’re earning income that isn’t taxed at the source, the IRS doesn’t want to wait until April. They want their share throughout the year.
2. How do I know if I need to pay them?
A quick rule of thumb: If you owed more than $1,000 in federal tax last year (after subtracting credits and withholding), you probably need to make estimated payments this year—unless your situation has changed.
3. What kind of income triggers this?
It’s not just business income. Estimated taxes may apply if you receive:
- Self-employment or freelance income
- Investment income (interest, dividends, capital gains)
- Rental income
- Alimony (for divorces finalized before 2019)
- Wages without enough withholding
- S-corp or partnership income passed through to you
4. What if I run a corporation?
S-corp owners typically don’t pay self-employment tax, but you’re still responsible for estimated payments on your salary and any pass-through profits.
If you’re paying yourself a reasonable salary and taking distributions, both pieces may require some tax planning.
5. What happens if I ignore this?
If you skip estimated tax payments when they’re required, the IRS can charge underpayment penalties—even if you pay your full tax bill by April 15.
These penalties add up quickly and are easily avoided by sending payments throughout the year.
6. When are payments due?
Estimated taxes are paid in four parts:
- April 15
- June 15
- September 15
- January 15 of the following year
Note: If the 15th falls on a weekend or holiday, the deadline moves to the next business day.
7. Where can I get help?
If you’re not sure how to calculate your payment—or want to know if this even applies to you—start with my Estimated Tax Checklist. It’s quick, clear, and written in plain English.
You’ll learn:
- How to identify income that triggers estimated taxes
- What to check on your prior-year return
- When to take action to avoid penalties
Download the checklist and learn more:
Categories: : Tax Planning