Question

Calculating and Paying Quarterly Estimated Taxes

Accepted Answer

Estimated tax payments are periodic prepayments made to the IRS and state tax agencies to cover income not subject to withholding. This includes income from self-employment, interest, dividends, rental income, capital gains, and other earnings. TaxAct provides tools to help calculate, schedule, and manage these payments efficiently. Individual Estimated Tax Payments are calculated and paid using Form 1040-ES.

You must make estimated tax payments if:

You expect to owe at least $1,000 in tax for the year after subtracting your withholding and refundable credits, and
Your withholding and timely estimated tax payments are less than the smaller of:
- 90% of your current year’s tax, or
- 100% of your previous year’s tax (110% if your AGI was over $150,000, or $75,000 if married filing separately).

Note: If your prior year’s tax liability was zero, you are not required to make estimated tax payments. You may choose to do so, however, to avoid a large balance due at tax time.

Estimated Taxes Due

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific due date. If you do not pay enough tax by each deadline, you may be charged a penalty—even if you receive a refund when you file your tax return. Standard due dates for estimated tax payments are:

April 15
June 15
September 15
January 15 (of the following year)

Notes:

You may pay the entire year's estimated tax on April 15, or you may pay your estimated tax in four installments.
If a due date falls on a Saturday, Sunday, or legal holiday, the payment is considered on time if made on the next business day.
If you miss a quarterly payment, increase the remaining payments accordingly to reduce potential penalties.
Even if your total estimated tax for the year is correct, you may still be penalized if the minimum required amount wasn't paid on time each quarter.

Special Rule for Farmers and Fishermen

If at least two-thirds of your gross income for 2023 or 2024 is from farming or fishing:

You have only one estimated tax due date for your 2024 tax: January 15, 2025
If you do not make that payment, you can still avoid an underpayment penalty by filing your 2024 return and paying the full tax due by March 3, 2025 (since March 1 falls on a weekend)

Set Up Estimated Tax Payments

From within your TaxAct return, click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
Click the Miscellaneous tab.
Click Review beside 2025 estimated tax payments, then click Yes to proceed
Choose the calculation option that you want to use, then click Continue.
- Use worksheet calculation
- Pay 100% of 2024 tax liability
Continue through the Q&A interview process to enter your information

Notes:

If you enter information to make estimated tax payments by electronic funds withdrawal while going through the Q&A interview questions, you must still mark each box to verify the quarterly payments when going through the e-filing steps.
The Estimated Tax Worksheet and payment vouchers are not transmitted with an e-filed return. The worksheet is for your records and the Form 1040-ES vouchers are to be sent with payments (if mailed).
Form 1040-ES computes the amount of your required estimated tax payments, regardless of whether you select the worksheet calculation or to pay 100% of 2025 tax liability. If you wish to pay additional amounts, you can modify your total 2025 estimated tax during the Q&A.

Apply an Overpayment Toward Next Year’s Tax

If your return currently shows a federal refund amount, you can apply part or all of that refund to next year's tax liability. To apply an overpayment, follow these steps:

From within your TaxAct return, click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
Click Miscellaneous Topics in the Federal Quick Q&A Topics menu to expand, then click Apply overpayment towards 2025 tax liability.
Continue with the interview process to enter the appropriate information.
On the screen titled Apply Overpayment Towards 2024 Tax Liability, click Apply specific amount of 2024 refund towards 2025 tax liability, enter the specific amount you want applied, then click Continue.

Payment Options

You can make payments using one of the following methods:

Electronic Funds Withdrawal (EFW): Schedule up to four payments during e-filing. There is no additional cost to schedule estimated payments.
Electronic Federal Tax Payment System (EFTPS): See EFTPS - Online Electronic Federal Tax Payment System for details.
Other: See the IRS Payments page for details on other options.

ES Payments Already Made

To enter or review information for federal, state, or local estimated tax payments made for your current year tax return, and any refund applied from the prior year's return in the TaxAct program:

From within your TaxAct return, click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
Click the Federal, state and local estimated tax payments made for 2024 dropdown.
Click Federal estimates.
Continue with the interview process to enter your information.

Cancellation Requests

Once your return is accepted, the information related to your Direct Debit payment, such as account details, payment date, or amount, cannot be modified. If changes are necessary, you must cancel the transaction and select a different payment method.

To cancel a payment scheduled through IRS e-file, call 1-888-353-4537 no later than 11:59 p.m. EST two business days before the scheduled date.
If a payment is returned by your financial institution (e.g., due to insufficient funds, incorrect account details, or a closed account), the IRS will send "Letter 4870" to the address on file. This letter will explain why the payment couldn’t be processed and provide alternative payment options. If your financial institution cannot process the payment, you are responsible for making alternative arrangements and for any penalties or interest incurred.
If there is an error in the withdrawn payment amount, contact your financial institution immediately.
For further questions, you can reach the IRS at 1-800-829-1040.
If the Treasury causes an incorrect withdrawal from your bank account, they will return any improperly transferred funds.
If the payment is for a state, you must contact the state tax agency to attempt to change your payment.

Removing Estimates

If you no longer want to have estimates generated or set up estimated tax payments during the e-filing steps, delete the estimated tax worksheet.

Online: go to Tools > Forms Assistant > FEDERAL Forms > Forms and Schedules > Form 1040-ES - 2025 Estimated Tax Worksheet and click the Delete icon, then click OK to confirm that you want to delete the form.
Desktop: go to Forms > Federal > Forms and Schedules > Form 1040-ES - 2025 Estimated Tax Worksheet > right click on the form and choose Delete Copy then Yes.

Prior Year Estimates

Once the final filing version of the TaxAct software is released in January, you are only able to complete estimated tax information (or print vouchers) for next year's return. For example, to calculate a 2024 estimated payment due January 15, 2025 (or print the voucher) use your 2023 TaxAct program. You would then have the option to print the voucher to mail the payment to the IRS, or use EFTPS.

Related Links

Accepted Answer

Estimated tax payments are periodic prepayments made to the IRS and state tax agencies to cover income not subject to withholding. This includes income from self-employment, interest, dividends, rental income, capital gains, and other earnings. TaxAct provides tools to help calculate, schedule, and manage these payments efficiently. Individual Estimated Tax Payments are calculated and paid using Form 1040-ES.

You must make estimated tax payments if:

You expect to owe at least $1,000 in tax for the year after subtracting your withholding and refundable credits, and
Your withholding and timely estimated tax payments are less than the smaller of:
- 90% of your current year’s tax, or
- 100% of your previous year’s tax (110% if your AGI was over $150,000, or $75,000 if married filing separately).

Note: If your prior year’s tax liability was zero, you are not required to make estimated tax payments. You may choose to do so, however, to avoid a large balance due at tax time.

Estimated Taxes Due

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific due date. If you do not pay enough tax by each deadline, you may be charged a penalty—even if you receive a refund when you file your tax return. Standard due dates for estimated tax payments are:

April 15
June 15
September 15
January 15 (of the following year)

Notes:

You may pay the entire year's estimated tax on April 15, or you may pay your estimated tax in four installments.
If a due date falls on a Saturday, Sunday, or legal holiday, the payment is considered on time if made on the next business day.
If you miss a quarterly payment, increase the remaining payments accordingly to reduce potential penalties.
Even if your total estimated tax for the year is correct, you may still be penalized if the minimum required amount wasn't paid on time each quarter.

Special Rule for Farmers and Fishermen

If at least two-thirds of your gross income for 2023 or 2024 is from farming or fishing:

You have only one estimated tax due date for your 2024 tax: January 15, 2025
If you do not make that payment, you can still avoid an underpayment penalty by filing your 2024 return and paying the full tax due by March 3, 2025 (since March 1 falls on a weekend)

Set Up Estimated Tax Payments

From within your TaxAct return, click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
Click the Miscellaneous tab.
Click Review beside 2025 estimated tax payments, then click Yes to proceed
Choose the calculation option that you want to use, then click Continue.
- Use worksheet calculation
- Pay 100% of 2024 tax liability
Continue through the Q&A interview process to enter your information

Notes:

If you enter information to make estimated tax payments by electronic funds withdrawal while going through the Q&A interview questions, you must still mark each box to verify the quarterly payments when going through the e-filing steps.
The Estimated Tax Worksheet and payment vouchers are not transmitted with an e-filed return. The worksheet is for your records and the Form 1040-ES vouchers are to be sent with payments (if mailed).
Form 1040-ES computes the amount of your required estimated tax payments, regardless of whether you select the worksheet calculation or to pay 100% of 2025 tax liability. If you wish to pay additional amounts, you can modify your total 2025 estimated tax during the Q&A.

Apply an Overpayment Toward Next Year’s Tax

If your return currently shows a federal refund amount, you can apply part or all of that refund to next year's tax liability. To apply an overpayment, follow these steps:

From within your TaxAct return, click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
Click Miscellaneous Topics in the Federal Quick Q&A Topics menu to expand, then click Apply overpayment towards 2025 tax liability.
Continue with the interview process to enter the appropriate information.
On the screen titled Apply Overpayment Towards 2024 Tax Liability, click Apply specific amount of 2024 refund towards 2025 tax liability, enter the specific amount you want applied, then click Continue.

Payment Options

You can make payments using one of the following methods:

Electronic Funds Withdrawal (EFW): Schedule up to four payments during e-filing. There is no additional cost to schedule estimated payments.
Electronic Federal Tax Payment System (EFTPS): See EFTPS - Online Electronic Federal Tax Payment System for details.
Other: See the IRS Payments page for details on other options.

ES Payments Already Made

To enter or review information for federal, state, or local estimated tax payments made for your current year tax return, and any refund applied from the prior year's return in the TaxAct program:

From within your TaxAct return, click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
Click the Federal, state and local estimated tax payments made for 2024 dropdown.
Click Federal estimates.
Continue with the interview process to enter your information.

Cancellation Requests

Once your return is accepted, the information related to your Direct Debit payment, such as account details, payment date, or amount, cannot be modified. If changes are necessary, you must cancel the transaction and select a different payment method.

To cancel a payment scheduled through IRS e-file, call 1-888-353-4537 no later than 11:59 p.m. EST two business days before the scheduled date.
If a payment is returned by your financial institution (e.g., due to insufficient funds, incorrect account details, or a closed account), the IRS will send "Letter 4870" to the address on file. This letter will explain why the payment couldn’t be processed and provide alternative payment options. If your financial institution cannot process the payment, you are responsible for making alternative arrangements and for any penalties or interest incurred.
If there is an error in the withdrawn payment amount, contact your financial institution immediately.
For further questions, you can reach the IRS at 1-800-829-1040.
If the Treasury causes an incorrect withdrawal from your bank account, they will return any improperly transferred funds.
If the payment is for a state, you must contact the state tax agency to attempt to change your payment.

Removing Estimates

If you no longer want to have estimates generated or set up estimated tax payments during the e-filing steps, delete the estimated tax worksheet.

Online: go to Tools > Forms Assistant > FEDERAL Forms > Forms and Schedules > Form 1040-ES - 2025 Estimated Tax Worksheet and click the Delete icon, then click OK to confirm that you want to delete the form.
Desktop: go to Forms > Federal > Forms and Schedules > Form 1040-ES - 2025 Estimated Tax Worksheet > right click on the form and choose Delete Copy then Yes.

Prior Year Estimates

Once the final filing version of the TaxAct software is released in January, you are only able to complete estimated tax information (or print vouchers) for next year's return. For example, to calculate a 2024 estimated payment due January 15, 2025 (or print the voucher) use your 2023 TaxAct program. You would then have the option to print the voucher to mail the payment to the IRS, or use EFTPS.

Related Links