Photo by Leeloo The First
…
Yes, it’s time for my regular nag reminder that another estimated tax deadline is nigh.
This time it’s the one for what the Internal Revenue Service consider our third quarter tax amount due on earnings not subject to payroll withholding.
That due date is next Tuesday, Sept. 15.
Types of estimated tax income: This typically covers self-employment amounts. This can be from your full-time business of which you are the boss. It also applies to from freelance work and independent contracting, as well as gig work you have in addition to your salaried job.
Other types of taxable income that necessitate estimated payments include —
- Investments earnings (dividends and capital gains distributions from fund, capital gains from selling stocks or property and ordinary interest);
- Taxable alimony (this affects marital dissolutions before the Tax Cuts and Jobs Act or 2017 took effect);
- Rental property income;
- Social Security benefits for certain recipients; and
- Gambling winnings, prizes, and awards.
If you have any of these earnings, you need to make estimated tax payments.
Payment timing: As the table below shows, the Sept. 15 payment is for such income collected during June, July and August. …
| Payment # | Due Date* | For income received |
| 1 | April 15 | Jan. 1 through March 31 |
| 2 | June 15 | April 1 through May 31 |
| 3 | Sept. 15 | June 1 through Aug. 31 |
| 4 | Jan. 15 of the next year | Sept. 1 through Dec. 31 |
| *If the 15th is on a weekend or federal holiday, the estimated payment is due the next business day. | ||
…
Again, as the table shows, the IRS quarters don’t match up with our usual calendar divisions (see quarters two and four). Rather, the appellation is because the IRS demands (in most cases) four of them.
There is some support in D.C. for re-aligning estimated tax payment deadlines to basic quarterly calendar divisions. Until that happens, though, keep track of when your estimated taxes are due.
Costs of late or missed estimated payments: The main reason to make sure you don’t miss an estimated tax payment is that doing so will cost you more.
Our tax system is pay-as-you-go. That means you must pay most of the tax you owe each year during the tax year. For salaried workers, paycheck withholding takes care of things.
For us estimated tax filers, the quarterly payments are our way to comply. And Uncle Sam makes sure we do so by assessing penalties and interest when we fall short.
That generally is when we end up owing $1,000 or more at filing time. But when estimated taxes are involved, things get more complicated and potentially costly.
You cannot simply make up the full shortfall with your final quarterly payment the next January. The IRS can (and usually will) penalize you for each estimated tax period where your payment was late or you didn’t make one.
If you have a job where withholding is in effect, you can adjust that amount as soon as possible, like now, to cover both your salary income and other untaxed earnings.
The IRS also offers some safe harbors to avoid the penalties. The primary one is that you pay via withholding and estimated tax at least 90 percent of the tax due for the current year or 100 percent of the tax shown on your prior year’s tax return.
That 100 percent method is the easiest. You take that amount from your Form 1040 — what was due on line 24, not what you paid as shown on line 37 — then divide it by four. Send the IRS that resulting amount on each of the estimated tax deadline dates.
Taxpayers who get untaxed income from farming or fishing, certain household employers, and certain higher income taxpayers face special estimated tax rules.
And if your earnings are uneven through the year, for example, you have a seasonal enterprise like landscaping where you make most of your money during the spring and fall, you should explore using the annualized income installment method to precisely figure your estimated tax amounts for each quarter. This method helps with cash flow, but does take more work and record keeping.
E-paying estimated taxes: OK, you’re ready to make your estimated tax payment. The best way to do so, especially with next week’s Sept. 15 deadline being, well, next week, is electronically.
The various way to e-pay any federal tax bill also usually apply to your estimated tax payments. The IRS, however, has a favorite. It wants us all to open an individual online taxpayer account and login there to meet all our tax obligations.
IRS.gov’s Individual Online Account has details on how to establish your account, as well as all the things you can do once it is in place. That includes making a same-day payment or scheduling payments up to 365 days in advance from your bank account.
That scheduling option is the route I took. I like just getting the payments set up each April and being done with them. Except of course, remembering to make sure I have enough money in the account to cover the IRS’ taking of it each estimated due date.
Uncle Sam wants that, too. That’s why my online account sends me an email nag reminder about a week before my next payment is scheduled.
Old school estimated tax payment problems: Finally, a note and suggestion for estimated tax payers who haven’t gone digital. These are the folks who still pay their quarterly payments by paper check or money order, and send it with the appropriate IRS 1040-ES payment voucher (they’re on pages 14 and 15 of the estimated tax package) via the U.S. Postal Service (USPS).
That’s fine. While the IRS prefers we all conduct all our tax business electronically, it still accepts paper payments. But meeting the due date isn’t as easy as it was before most of us digitized our tax and other lives.
Back then, estimated tax payers mailed the due amounts as late as the due date itself. That was fine. The postmark affixed to the envelope was accepted as timely payment, even when the IRS got it days later.
But on Dec. 24, 2025, that timeliness was changed to reflect when the mailed item is first processed at a USPS. That processing could be days after you actually mailed it. And that would make your estimated tax payment late, and subject to penalty and interest charges.
So if you’re still taking the USPS payment route, send your estimated tax payment via certified or registered mail. The receipt for either type of mailing is acceptable proof that you put your payment in the system on time.
…
Advertisements
🌟 Search Amazon Tax Products 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.
