Do you need to pay estimated taxes?
If you expect to owe $1,000 or more after subtracting withholding and credits, the IRS generally requires quarterly payments. This typically applies to:
- Self-employed workers
- Freelancers
- Gig workers
- Landlords
- People with investment income
If you’re a W-2 employee, you can often avoid estimated payments entirely by increasing your paycheck withholding instead.
IRS online payment options compared
| Tool | Cost | Registration | Best for |
|---|---|---|---|
| IRS Direct Pay | Free | None | One-time or occasional payments |
| EFTPS | Free | Required (up to 7 days) | Scheduling all four quarters at once |
| Credit/debit card | Processing fees vary by provider | None | Covering tax payments and maximizing credit card benefits |
How to pay using IRS Direct Pay
- Go to IRS Direct Pay (no registration required).
- Click “Make a Payment.”
- Select “Estimated Tax” as the reason and choose Form 1040-ES.
- Select the correct tax year.
- Verify your identity using prior-year return details.
- Enter your bank routing and account numbers.
- Choose your amount and payment date. You can schedule up to 365 days ahead.
- Confirm and save your confirmation number.
How to pay using EFTPS
- Enroll at eftps.gov with your Social Security number or Employer Identification Number and bank information; your PIN arrives by mail within about 7 days.
- Once enrolled, log in.
- Select 1040-ES estimated tax.
- Enter your amount and date.
EFTPS is especially useful if you want to schedule all four quarterly payments at once.
How to avoid underpayment penalties
The safe harbor rule protects you from an underpayment penalty if you pay at least 90% of your current-year tax or 100% of last year’s tax (110% if your 2025 adjusted gross income exceeded $150,000). You don’t have to pay in exact quarterly chunks—weekly, biweekly, or monthly payments work too, as long as each quarter’s cumulative total is met on time.
How to record estimated tax payments on your return
Report your total estimated payments on Form 1040, line 26. State estimated taxes are paid separately to your state’s department of revenue. You may want to keep confirmation numbers as proof of payment.
Staying current on estimated payments can help you avoid a surprise tax bill. Once you’re set up, you can learn how to estimate your income tax to calculate the right quarterly amount.
