Estimated Tax Payments for 2025

Federal Estimated Tax Payment Rules for 2025

If you expect to owe at least $1,000 in federal taxes after subtracting withholding and refundable credits, you’re generally required to make estimated tax payments for the current tax year. Here’s a breakdown of the rules for a very common question we receive:

It is important to ensure that your total tax payments, including withholding and estimated payments, meet certain requirements to avoid penalties for underpayment.

Who Needs to Pay Estimated Taxes?

• Individuals, including sole proprietors, partners, and S-corporation shareholders, who don’t have enough tax withheld from wages, pensions, or other income.

• High-Income Earners: If your adjusted gross income (AGI) was more than $150,000 ($75,000 if married filing separately) in the previous year, you must pay 110% of your prior year’s tax liability to avoid penalties.

Payment Schedule for 2025

Federal estimated tax payments are divided into four equal installments:

1. 1st Payment: Due April 15, 2025.

2. 2nd Payment: Due June 17, 2025.

3. 3rd Payment: Due September 16, 2025.

4. 4th Payment: Due January 15, 2026.

Payment Options

Online:

Use IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS) to make payments directly from your bank account.

By Mail:

Submit payment vouchers using Form 1040-ES.

Debit/Credit Cards:

Payments can be made via IRS-approved processors, but processing fees may apply.

Avoiding Penalties

Penalties may apply if:

You fail to pay enough estimated tax by the due dates.

You underpay based on the rules (90% of 2025 taxes or 100%/110% of 2024 taxes).

California Estimated Taxes

In California, if you expect to owe at least $500 ($250 if married/RDP filing separately) in state income tax for 2025 after accounting for withholding and refundable credits, you’re generally required to make estimated tax payments.

Payment Schedule for 2025:

California’s estimated tax payments are divided into four installments with the following due dates and corresponding payment percentages:

1. 1st Payment: 30% of the estimated tax liability, due by April 15, 2025.

2. 2nd Payment: 40% of the estimated tax liability, due by June 17, 2025.

3. 3rd Payment: No payment due.

4. 4th Payment: 30% of the estimated tax liability, due by January 15, 2026.

This uneven payment schedule is unique to California and differs from the federal estimated tax payment structure.

High-Income Taxpayers:

• If your 2024 California adjusted gross income (AGI) exceeded $150,000 ($75,000 if married/RDP filing separately), you must base your estimated tax payments on the lesser of:

• 90% of your 2025 tax liability, or

• 110% of your 2024 tax liability.

• For those with a 2025 California AGI of $1,000,000 or more ($500,000 if married/RDP filing separately), estimated tax payments must be based on 90% of the 2025 tax liability.

Payment Methods:

• Online: Use Web Pay to make payments directly from your bank account.

• By Mail: Use Form 540-ES, Estimated Tax for Individuals, ensuring you select the correct payment voucher for each due date.