Form 1040-ES: Estimated Tax for Individuals (2023)
What Form 1040-ES Is For
Form 1040-ES is the IRS form used to calculate and pay estimated taxes on income that isn't subject to automatic tax withholding. The United States tax system operates on a "pay-as-you-go" basis, meaning taxpayers must pay taxes throughout the year as they earn income, rather than waiting until they file their annual tax return in April.
This form serves taxpayers who receive income without taxes automatically withheld, which commonly includes self-employment earnings (freelancers, independent contractors, gig workers, small business owners), rental property income, investment income (interest, dividends, capital gains), alimony payments received, prize and award winnings, unemployment compensation, and the taxable portion of Social Security benefits. Even if you have a regular job with withholding, you might still need Form 1040-ES if you have substantial additional income from these other sources.
The form package includes detailed worksheets to help you estimate your total annual tax liability for 2023, accounting for expected income, deductions (including the increased 2023 standard deductions of $13,850 for single filers, $27,700 for married filing jointly, and $20,800 for head of household), tax credits, and other taxes like self-employment tax. It also provides four payment vouchers corresponding to the four quarterly payment deadlines, though most taxpayers now pay electronically through IRS.gov rather than mailing paper vouchers.
For 2023, Form 1040-ES also helps you calculate self-employment tax on net earnings up to $160,200 for the Social Security portion, plus Medicare tax on all self-employment income. The form ensures you meet your tax obligations throughout the year and avoid underpayment penalties when you file your annual return.
When You’d Use Form 1040-ES (and Late/Amended Payments)
When You Must Use Form 1040-ES
You must make estimated tax payments for 2023 if both of the following conditions apply: First, you expect to owe at least $1,000 in tax after subtracting your withholding and refundable credits when you file your return. Second, your withholding and refundable credits will be less than the smaller of either 90% of the tax shown on your 2023 tax return, or 100% of the tax shown on your 2022 tax return. Your 2022 return must have covered all 12 months for this second test to apply.
There's an important special rule for higher-income taxpayers: if your adjusted gross income for 2022 exceeded $150,000 (or $75,000 if married filing separately for 2023), you must substitute 110% for 100% when using your prior year's tax as the safe harbor. This means high earners need to pay 110% of their 2022 tax to avoid penalties using the prior-year method.
Exceptions—When You Don't Need to File
You don't have to pay estimated tax for 2023 if you meet all three of these conditions: you were a U.S. citizen or resident alien for all of 2022, you had no tax liability for the full 12-month 2022 tax year (meaning your total tax was zero or you didn't have to file an income tax return), and you expect the same for 2023. Additionally, employees who receive wages can often avoid estimated payments by asking their employer to withhold additional federal income tax using Form W-4. There's a special line on Form W-4 specifically for requesting extra withholding.
2023 Payment Due Dates
The tax year is divided into four payment periods with specific due dates: The first payment covers January 1 through March 31 and is due April 18, 2023. The second payment covers April 1 through May 31 and is due June 15, 2023. The third payment covers June 1 through August 31 and is due September 15, 2023. The fourth payment covers September 1 through December 31 and is due January 16, 2024. However, you don't have to make the January 16, 2024 payment if you file your complete 2023 tax return and pay the entire balance due by January 31, 2024.
Late Payments and Penalties
If you miss a payment deadline or don't pay enough for a given quarter, penalties begin accruing from the due date of that specific payment period. The underpayment penalty is imposed on each underpayment for the number of days it remains unpaid, calculated using the federal short-term rate plus 3 percentage points. This penalty can apply even if you're ultimately due a refund when you file your annual return—the issue isn't how much you owe at year-end, but whether you paid enough during each quarter throughout the year.
Amending Your Estimated Tax
If your income, deductions, credits, or other tax situation changes during the year, you should recalculate your estimated tax using a new Form 1040-ES worksheet. To figure the corrected payment due for each remaining quarter, see the "Amended estimated tax" section in Chapter 2 of Publication 505. If you discover you've been underpaying, increase your remaining payments to make up the difference, though you may still owe a penalty for the earlier quarters where you underpaid. If you've been overpaying, you can reduce future payments accordingly. You can also make estimated payments more frequently than quarterly—weekly, biweekly, monthly, or any schedule that works for you—as long as you've paid enough by each quarter's due date.
Special Rules for Different Taxpayer Groups
Farmers and fishermen who receive at least two-thirds of their gross income from farming or fishing can either pay all their estimated tax by January 16, 2024, or file their complete 2023 return by March 1, 2024, and pay the total tax due, with no earlier estimated payments required. Fiscal year taxpayers (those whose 12-month tax period ends on any day except December 31) make payments on the 15th day of the 4th, 6th, and 9th months of their current fiscal year, plus the 1st month of the following fiscal year.
Key Rules or Details for 2023
The $1,000 Threshold Rule
The fundamental triggering requirement is that you must pay estimated tax if you expect to owe at least $1,000 in tax when you file your return, after subtracting your withholding and refundable credits. This $1,000 threshold is your first checkpoint—if you'll owe less than this, you don't need to worry about estimated payments regardless of your income level or sources.
The Safe Harbor Rules
Safe harbor rules protect you from underpayment penalties even if you end up owing additional tax at filing time. You satisfy the safe harbor and avoid penalties if your total estimated payments and withholding equal at least the smaller of two amounts: 90% of the tax shown on your current year's (2023) tax return, or 100% of the tax shown on your prior year's (2022) tax return. Your 2022 return must have covered all 12 months to use this prior-year safe harbor. These rules give you flexibility when income is unpredictable—you can use last year's known tax amount as a safe target even if your current year's income increases substantially.
Higher Income Taxpayer Rules
If your adjusted gross income for 2022 was more than $150,000 ($75,000 if your 2023 filing status is married filing separately), the prior-year safe harbor increases from 100% to 110%. This means high-income taxpayers must pay 110% of their 2022 tax to use the prior-year safe harbor method. This rule doesn't apply to the 90% current-year safe harbor, and it doesn't apply to farmers or fishermen regardless of income level.
Special Rules for Farmers and Fishermen
If at least two-thirds of your gross income for 2022 or 2023 comes from farming or fishing, substitute 66⅔% for 90% in the safe harbor calculation. Additionally, you can make a single estimated tax payment by January 16, 2024, instead of four quarterly payments, or alternatively file your complete 2023 Form 1040 or 1040-SR by March 1, 2024, and pay the entire tax due, avoiding estimated payments altogether. These special provisions recognize the seasonal nature of agricultural income.
Self-Employment Tax Requirements
Self-employed individuals must pay both income tax and self-employment tax through estimated payments. Self-employment tax covers Social Security and Medicare and equals 15.3% of net self-employment earnings: 12.4% for Social Security on the first $160,200 of net earnings in 2023, plus 2.9% for Medicare on all net earnings, plus an additional 0.9% Medicare tax on earnings exceeding certain thresholds ($200,000 for single filers, $250,000 for married filing jointly). When calculating your self-employment tax, multiply your net profit by 92.35% (0.9235) first. You can then deduct half of your self-employment tax when figuring adjusted gross income, which the Form 1040-ES worksheet accounts for automatically.
Withholding Is Treated As Paid Evenly Throughout the Year
This rule provides a significant advantage for wage earners with additional income: federal income tax withheld from wages, pensions, annuities, or other sources is treated as having been paid evenly throughout the year, even if the actual withholding occurred late in the year. This means you can avoid underpayment penalties for early quarters by significantly increasing your withholding in later paychecks, whereas estimated tax payments must actually be made by their respective due dates to count for that quarter.
Joint Estimated Tax Payments
Married couples can make joint estimated tax payments if they'll file a joint return for the year. However, you cannot make joint estimated tax payments if either you or your spouse is a nonresident alien, you're separated under a decree of divorce or separate maintenance, or you and your spouse have different tax years. List names and Social Security numbers in the same order on estimated tax payment vouchers as you will on your joint annual return. Individuals in registered domestic partnerships, civil unions, or other similar relationships that aren't marriages under state law cannot make joint estimated payments and can take credit only for the payments they individually made.
Household Employer Rules
If you employ household workers (housekeepers, nannies, caregivers, etc.), include household employment taxes in your estimated tax payments only if either of the following applies: you'll have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income; or you would be required to make estimated tax payments even without including household employment taxes. If neither condition applies, don't include household employment taxes in your quarterly estimates—you'll pay them with your annual return instead.
Step-by-Step: How to Complete Form 1040-ES (High Level)
Step 1: Gather Your Financial Information and Prior Year Return
Begin by collecting your 2022 Form 1040 or 1040-SR and all supporting schedules to use as a baseline. Review the "What's New" section of Form 1040-ES to identify tax law changes for 2023, including increased standard deduction amounts and any changes to tax rates, credits, or deductions. Estimate your expected income for 2023 from all sources: wages (if any), self-employment income, rental income, interest, dividends, capital gains, retirement distributions, and any other taxable income. If you're self-employed, project your net profit realistically, considering both seasonal variations and business trends.
Step 2: Complete the 2023 Estimated Tax Worksheet—Income and Deductions
Start with line 1, entering your expected adjusted gross income for 2023. This is your total income minus certain deductions like the deductible portion of self-employment tax, contributions to self-employed retirement plans, self-employed health insurance, and IRA deductions. For line 2a, enter either your estimated itemized deductions or your standard deduction, whichever is larger. Use the increased 2023 standard deduction amounts unless you'll have large deductible expenses like mortgage interest, state and local taxes (limited to $10,000), charitable contributions, or medical expenses exceeding 7.5% of AGI. On line 2b, if you're eligible for the qualified business income deduction (available to many self-employed individuals and pass-through business owners), enter the estimated deduction amount. Add lines 2a and 2b, enter the total on line 2c, then subtract line 2c from line 1 to get your taxable income on line 3.
Step 3: Calculate Your Tax Using the 2023 Tax Rate Schedules
On line 4, calculate your tax by applying the appropriate 2023 Tax Rate Schedule (included with Form 1040-ES) for your filing status: Single, Married Filing Jointly/Qualifying Surviving Spouse, Married Filing Separately, or Head of Household. The 2023 rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, applied to progressively higher income brackets. If you expect to have qualified dividends or net capital gains, or if you'll exclude or deduct foreign earned income, you'll need to use the more complex worksheets in Publication 505 to calculate your tax correctly, as these items receive preferential tax treatment.
Step 4: Add Alternative Minimum Tax and Other Taxes
On line 5, enter any alternative minimum tax you expect to owe (calculate using Form 6251 if you have substantial adjustments or preferences). Add lines 4 and 5, plus any additional taxes from Schedule 2 (Form 1040), and enter the total on line 6. On line 9, calculate your self-employment tax using the Self-Employment Tax and Deduction Worksheet included with Form 1040-ES—this is crucial for self-employed individuals, as this tax often equals or exceeds regular income tax. On line 10, include other taxes such as Additional Medicare Tax on high earners (0.9% on wages and self-employment income above $200,000/$250,000), Net Investment Income Tax (3.8% on certain investment income for higher-income taxpayers), household employment taxes (if they apply), or recapture taxes. Don't include certain taxes that aren't required until you file your annual return, such as the first-time homebuyer credit repayment or uncollected Social Security and Medicare tax.
Step 5: Subtract Credits and Determine Total Estimated Tax
On line 7, enter credits you expect to claim, such as the child tax credit, child and dependent care credit, education credits, residential energy credits, or other nonrefundable credits. Don't include any income tax withholding on this line—that comes later. Subtract line 7 from line 6 to get line 8. On line 11a, add lines 8, 9, and 10 together. On line 11b, enter refundable credits like the earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, and refundable American opportunity credit. Finally, subtract line 11b from line 11a to get line 11c—your total estimated tax for 2023.
Step 6: Apply Safe Harbor Rules and Determine Required Payment
On line 12a, multiply line 11c by 90% (or 66⅔% if you're a farmer or fisherman). On line 12b, enter your prior year's tax from your 2022 return—100% of that amount if your 2022 AGI was $150,000 or less ($75,000 or less if married filing separately), or 110% if your 2022 AGI exceeded those thresholds. Follow the specific instructions for determining your 2022 tax correctly, subtracting certain items and making adjustments if you're changing filing status or if you filed jointly last year but will file separately this year. On line 12c, enter the smaller of line 12a or line 12b—this is your required annual payment to avoid penalties.
Step 7: Account for Withholding and Calculate Quarterly Payments
On line 13, enter the total income tax you expect to have withheld during 2023 from wages, pensions, annuities, gambling winnings, or other sources. Don't include Social Security or Medicare taxes withheld from wages—only federal income tax withholding counts here. On line 14a, subtract line 13 from line 12c. If the result is zero or less, stop—you're not required to make estimated tax payments. If line 14a is positive, continue to line 14b: subtract line 13 from line 11c. If this result is less than $1,000, stop—you're not required to make estimated tax payments. If line 14b is $1,000 or more, proceed to line 15.
Step 8: Calculate Individual Payment Amounts and Submit Payments
On line 15, if your first payment is due April 18, 2023, enter one-fourth (¼) of line 14a, minus any 2022 overpayment you're applying to this installment. This gives you your quarterly payment amount. Make payments using one of several methods: the fastest and most convenient is IRS Direct Pay at IRS.gov/Payments, which allows free electronic transfers directly from your checking or savings account. You can also pay through your IRS Online Account at IRS.gov/Account, where you can see your payment history and tax records. Other options include paying by debit or credit card (convenience fees apply), through the Electronic Federal Tax Payment System (EFTPS) after enrolling, via the IRS2Go mobile app, or by mailing a check or money order with the appropriate payment voucher to the address for your state. If mailing payments, make checks payable to "United States Treasury," write "2023 Form 1040-ES" and your Social Security number on the check, and don't staple the payment to the voucher.
Step 9: Keep Records and Track Your Payments
Maintain a record of all estimated tax payments, including dates paid, amounts, confirmation numbers (for electronic payments), or check numbers (for mailed payments). Use the "Record of Estimated Tax Payments" table included with Form 1040-ES to track this information. Save your completed worksheet and all calculations—you'll need these when preparing your 2023 tax return. Periodically review your income and tax situation throughout the year, especially after major financial changes, and recalculate if necessary to avoid underpayment penalties or excessive overpayments.
Common Mistakes and How to Avoid Them
Mistake 1: Significantly Underestimating Income or Overestimating Deductions
The most common and costly error is inaccurately projecting annual income, particularly for self-employed individuals whose earnings fluctuate. Being too optimistic about deductions or too pessimistic about income leads to underpayment penalties. Avoid this mistake by reviewing your actual income quarterly and comparing it to your projections. If you're consistently earning more than expected, complete a new Form 1040-ES worksheet immediately and increase your remaining quarterly payments. Consider using the annualized income installment method (Form 2210, Schedule AI) if your income arrives unevenly during the year—for example, if you operate a seasonal business that earns most income in summer, or if you realize a large capital gain in November. This method allows smaller payments in quarters when you actually earned less income, avoiding penalties for those periods.
Mistake 2: Forgetting to Include Self-Employment Tax in the Calculation
Self-employed taxpayers frequently calculate their regular income tax correctly but completely forget about self-employment tax, which equals 15.3% of net self-employment earnings. This oversight can result in massive underpayment. To avoid this mistake, always use the Self-Employment Tax and Deduction Worksheet for Lines 1 and 9 of the Estimated Tax Worksheet included with Form 1040-ES. This worksheet ensures you calculate both the self-employment tax itself (which goes on line 9) and the deduction for half of self-employment tax (which reduces your adjusted gross income on line 1). Remember that self-employment tax often equals or exceeds your regular income tax, especially at lower income levels where marginal income tax rates are modest but the 15.3% self-employment tax applies fully.
Mistake 3: Using the Wrong Safe Harbor Percentage for High-Income Taxpayers
High-income taxpayers whose 2022 adjusted gross income exceeded $150,000 ($75,000 if married filing separately) must use 110% of their prior year's tax as the safe harbor, not 100%. Missing this adjustment causes taxpayers to believe they've paid enough when they actually haven't, resulting in unexpected penalties. Double-check your 2022 AGI before calculating your safe harbor requirement—it's the amount on your 2022 Form 1040 or 1040-SR, line 11. If you're over the threshold, multiply your 2022 total tax by 110% (1.10) when completing line 12b of the worksheet.
Mistake 4: Missing or Confusing Quarterly Payment Due Dates
Many taxpayers assume estimated payments are due on the same day each quarter or on the last day of each quarter, but the actual due dates are April 18, June 15, September 15, and January 16. These dates aren't evenly spaced—note that the second quarter payment period is only two months (April-May) while the third quarter period is three months (June-August). Missing a due date means penalties begin accruing immediately from that date, not from the end of the year. Mark all four due dates prominently on your calendar with reminders a week in advance. If a due date falls on a Saturday, Sunday, or legal holiday, the deadline moves to the next business day.
Mistake 5: Incorrect or Mismatched Social Security Numbers and Names
Using an incorrect Social Security number, Individual Taxpayer Identification Number (ITIN), or a name that doesn't match Social Security Administration records causes payment processing delays and can result in payments being misapplied or lost. If you've recently changed your name due to marriage, divorce, or other reasons, report the change to the Social Security Administration by filing Form SS-5 before making estimated payments under your new name. When making joint estimated payments, list names and Social Security numbers in exactly the same order you'll use on your joint Form 1040—taxpayer first, spouse second. If you previously used an ITIN but have now been issued a Social Security number, stop using the ITIN immediately and use only your SSN.
Mistake 6: Not Recalculating When Life or Financial Circumstances Change
Many taxpayers calculate estimated payments in January or April and never revisit them, even when major life changes occur. Getting married or divorced, having or adopting a child, starting or losing a job, experiencing a large business loss or windfall, receiving an inheritance, selling property, or any other significant financial event changes your tax picture. Don't wait until you file your return to discover the problem. Recalculate your estimated tax at least quarterly—set a recurring calendar reminder for the week before each payment due date. Completing a fresh worksheet takes 30-45 minutes but can save you hundreds or thousands of dollars in penalties and interest.
Mistake 7: Confusing Estimated Tax Payments with Withholding on Form W-4
Some taxpayers with wage income plus self-employment income try to handle everything through estimated payments and ignore withholding adjustments, or vice versa. The optimal strategy usually involves both: adjust withholding to cover your tax on wage income plus some extra, then make estimated payments to cover self-employment tax and tax on other non-wage income. Remember that withholding is treated as paid evenly throughout the year for penalty purposes, even if actually withheld late in the year, while estimated payments must be made by their actual due dates. If you're behind on estimated payments in October, increasing your W-4 withholding for the remainder of the year can help you avoid penalties for earlier quarters.
Mistake 8: Making Payment to Wrong Address or Incorrectly Completing Voucher
If paying by check, each payment voucher must go to the specific address for your state as shown in the Form 1040-ES instructions—these addresses differ from where you mail your annual tax return. Using the wrong address delays processing by weeks or months. When completing payment vouchers, enter only the amount you're actually sending by check in the payment amount box—don't include any 2022 overpayment you're applying to 2023 in this box, even though you reduce your line 15 calculation by that amount. Make checks payable exactly to "United States Treasury" (not IRS, not Internal Revenue Service), write "2023 Form 1040-ES" and your Social Security number on the check, and don't staple or attach the check to the voucher—just enclose them together in the envelope.
What Happens After You File
Payment Processing and Account Crediting
When you make an estimated tax payment, the IRS posts it to your tax account under your Social Security number. Electronic payments made through IRS Direct Pay, your Online Account, EFTPS, or card processors typically post within one to two business days. Mailed payments take significantly longer—usually two to four weeks from the date the IRS receives them, not the postmark date. The IRS credits payments to the quarter for which they're designated, based on the payment voucher or electronic payment designation. You can verify that payments posted correctly by logging into your Online Account at IRS.gov/Account and viewing your payment history. This account shows your current balance, payment records for the past five years, and scheduled payments.
Reconciliation When Filing Your Annual Return
When you prepare and file your 2023 Form 1040 or 1040-SR in 2024, you'll report the total amount of estimated tax payments you made during 2023 on Form 1040, line 26. The IRS's computer system automatically matches the estimated payments on your account (identified by your Social Security number) with the amount you claim on your return. Your total estimated payments, plus any federal income tax withheld from wages, pensions, or other sources, plus any refundable credits, are subtracted from your total tax liability to determine your final balance due or refund amount. If the IRS's records show different estimated payment amounts than what you report, you'll receive a notice asking you to verify the discrepancy—this is why keeping confirmation numbers and records is essential.
Overpayment Options
If your estimated payments and withholding exceed your actual tax liability, you have two choices: receive the overpayment as a refund, or apply all or part of it to your 2024 estimated tax. You make this election on your 2023 Form 1040, indicating the amount to apply to 2024. If you choose to apply the overpayment to next year's estimated tax, it's treated as though you made a payment on April 15, 2024 (the due date of your 2023 return, not when you actually file). This reduces your first quarter 2024 payment requirement. However, be aware that once you elect to apply an overpayment to the following year's estimated tax, the decision is irrevocable—you cannot change your mind and request a refund instead, even if your 2024 circumstances change dramatically.
Underpayment Penalty Assessment
If you didn't pay enough estimated tax or paid late, the IRS will automatically calculate the Underpayment of Estimated Tax by Individuals Penalty and either bill you separately or reduce your refund by the penalty amount. In most cases, you don't need to calculate the penalty yourself—the IRS does it for you and sends Notice CP14 or a similar notice showing the penalty amount, how it was calculated, and payment instructions if you owe additional money. The penalty is calculated separately for each payment period based on the amount of underpayment, the number of days it remained unpaid, and the applicable interest rate (the federal short-term rate plus 3 percentage points, which changes quarterly). The penalty can apply even if you're owed a refund—the question isn't your final balance on the return, but whether you paid enough during each quarter throughout the year.
Calculating and Reporting the Penalty Yourself (Optional)
While the IRS usually calculates underpayment penalties automatically, you can calculate it yourself using Form 2210 (Underpayment of Estimated Tax by Individuals, Estates, and Trusts) if you want to see the exact calculation, if you qualify for an exception or waiver, or if you're using the annualized income installment method. You must file Form 2210 with your return if you're using the annualized income installment method, even if it shows no penalty owed, so the IRS knows not to automatically assess a penalty. File Form 2210 with Schedule AI if you're claiming a waiver based on unusual circumstances, retirement or disability, or uneven withholding. If you figure the penalty yourself using Form 2210, report the penalty amount on Schedule 2 (Form 1040), line 8, and check the box indicating you're including Form 2210.
Penalty Waivers and Reductions
The IRS may waive the underpayment penalty in certain situations, though the criteria are limited. The penalty may be waived if the underpayment was due to a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty—for example, your home was destroyed in a federally declared disaster, a serious illness prevented you from managing your finances, or you relied on erroneous written advice directly from the IRS in response to your written request. The penalty may also be waived or reduced if you or your spouse retired (after reaching age 62) or became disabled during 2023 or 2022, and the underpayment was due to reasonable cause and not willful neglect. If you qualify for a waiver, submit a written explanation signed under penalty of perjury to the address shown on your penalty notice, along with supporting documentation. The IRS will review your request and notify you of their decision.
Interest on Penalties
The IRS charges interest on penalties from the original due date until you pay in full. Interest on the underpayment penalty itself accrues at the same rate used to calculate the penalty (federal short-term rate plus 3 percentage points). This means if you don't pay an assessed penalty when notified, you'll owe interest on top of the penalty, compounding your total obligation. Interest continues to accrue until you pay both the original penalty and all accumulated interest in full.
Record Retention Requirements
Keep comprehensive records of all estimated tax payments and related calculations for at least three years after filing your return, or longer if you have specific circumstances requiring extended record retention. Records should include completed Form 1040-ES worksheets showing your calculations, confirmation numbers or receipts for all payments made, copies of checks or money orders if you paid by mail, bank statements showing electronic payment withdrawals, copies of payment vouchers, and correspondence with the IRS regarding estimated payments or penalties. These records prove you made payments if discrepancies arise, support your calculations if the IRS questions your estimated tax determinations, and document your eligibility for penalty waivers if you need to request one.
Payment Plans for Amounts Owed
If you can't pay your total tax liability when you file your 2023 return, including any underpayment penalties, you can apply for an installment agreement payment plan. Apply online at IRS.gov/Payments or submit Form 9465 with your tax return. Short-term payment plans (180 days or less) have no setup fee for electronic payments, while long-term plans charge a setup fee that varies depending on whether you choose automatic monthly direct debit (lowest fee) or other payment methods. Note that underpayment penalties and interest continue to accrue on unpaid balances even while you're on a payment plan, so it's best to pay as much as you can upfront and minimize the amount you finance through the installment agreement.
FAQs
Can I voluntarily make estimated tax payments even if I'm not legally required to?
Absolutely—you can make voluntary estimated tax payments anytime, even if you don't meet the thresholds requiring payments. Many taxpayers do this to avoid owing a large amount when filing their return, to spread tax obligations evenly throughout the year for budgeting purposes, or to ensure they'll receive a refund rather than owe money. There's no penalty or downside to making voluntary estimated payments. Any overpayment will either be refunded when you file your return or applied to next year's estimated tax at your election. Some taxpayers use voluntary estimated payments as a form of forced savings, essentially having the IRS hold money for them until they file their return.
What if I absolutely cannot afford to make my estimated tax payment on time?
Pay whatever amount you can by the due date—even a partial payment reduces the underpayment penalty since it's calculated on the unpaid balance. The penalty accrues daily on whatever remains unpaid, so every dollar you pay on time reduces your total penalty. If your financial situation improves later in the year, you can make catch-up payments or increase remaining quarterly payments to minimize penalties. When you file your annual return, if you still owe money you can't pay, apply for an installment agreement through your Online Account at IRS.gov/Account or submit Form 9465. The underpayment penalty for late estimated payments must be paid separately and cannot be included in installment agreement plans, but the underlying tax liability can be paid over time.
Do I need to file or mail Form 1040-ES paperwork if I pay electronically?
No—Form 1040-ES serves two distinct purposes: the worksheet helps you calculate how much to pay, and the payment vouchers provide a way to mail checks. If you complete the worksheet (which you should) to determine your payment amount but then pay electronically through IRS Direct Pay, your Online Account, EFTPS, by card, or via mobile app, you don't submit anything to the IRS except the electronic payment itself. Keep the completed worksheet for your records and for reference when preparing your annual return, but you don't mail it anywhere. The worksheet is purely for your own calculation purposes. This is one of several advantages of paying electronically—no paperwork, instant confirmation, immediate posting to your account, and no risk of lost mail.
Can married couples make joint estimated tax payments, and what happens if we change our minds?
Married couples can make joint estimated tax payments if they plan to file a joint return for the year. However, joint estimated payments aren't allowed if either spouse is a nonresident alien, if you're separated under a decree of divorce or separate maintenance, if you have different tax years, or if you're in a registered domestic partnership or civil union that isn't a marriage under state law. If you make joint estimated payments during the year but then decide to file separate returns, you must allocate the payments between spouses. Generally, each spouse gets credit for the payments they actually made, though you can agree otherwise in writing. This allocation can become complicated and contentious if the marriage is dissolving. List names and Social Security numbers on joint payment vouchers in the exact same order you'll use on your joint return—taxpayer first, spouse second—to avoid processing problems.
What should I do if my income changes dramatically midyear—significantly increasing or decreasing?
Recalculate your estimated tax immediately using a fresh Form 1040-ES worksheet. If income increased substantially, raise your remaining quarterly payments to avoid underpayment penalties. Calculate how much you've already paid, determine your new total annual tax liability, subtract what you've already paid, and divide the remainder among your remaining payment periods (making sure each quarter's payment at least meets the minimum safe harbor requirements). If income decreased dramatically—perhaps you lost a major client, your business slowed down, or you retired midyear—recalculate and reduce your remaining payments so you're not lending the government excessive funds interest-free. You might still owe a penalty for quarters where you overpaid relative to actual income earned during that period, but you can use the annualized income installment method on Form 2210, Schedule AI to minimize or eliminate penalties by showing you paid enough based on when income was actually earned.
How does increasing withholding from my W-4 compare to making estimated tax payments?
Increasing withholding through Form W-4 offers significant advantages if you receive wages. Most importantly, withholding is treated as paid evenly throughout the year for penalty calculation purposes, even if it's actually withheld in the final months. This means if you realize in November that you've underpaid estimated tax for earlier quarters, dramatically increasing your W-4 withholding for November and December can eliminate or reduce penalties that would otherwise apply to April, June, and September. In contrast, estimated tax payments must actually be made by their specific due dates to count for that quarter. Withholding is also automatic once you submit Form W-4—you don't have to remember quarterly due dates. However, if you have substantial self-employment income or your total tax liability greatly exceeds your wages, withholding alone won't cover your full obligation and you'll need estimated payments as well. Many taxpayers use a combination: maximize W-4 withholding to cover as much as possible, then make estimated payments for the remainder.
Are there really special rules just for farmers and fishermen, and how do I know if I qualify?
Yes, farmers and fishermen receive significantly more flexible estimated tax rules recognizing that agricultural and fishing income arrives in concentrated periods rather than evenly throughout the year. You qualify if at least two-thirds of your total gross income for either 2022 or 2023 comes from farming or fishing. If you qualify, you can choose one of three options: make just one estimated payment by January 16, 2024 (instead of four quarterly payments), file your complete 2023 tax return and pay the entire balance due by March 1, 2024 (avoiding estimated payments completely), or make four quarterly payments using the reduced safe harbor of 66⅔% of current year's tax instead of 90%. Calculate gross income by totaling all income before subtracting any expenses or deductions—if farming/fishing income divided by total gross income equals 66.67% or more, you qualify. Farming includes operating a farm, plantation, ranch, nursery, or orchard; raising or harvesting agricultural or horticultural commodities; and operating a farm for profit. Fishing includes operating fishing vessels. If you qualify and owe an underpayment penalty, use Form 2210-F instead of Form 2210.
What happens if I change my name during the year, and how do I ensure my estimated payments are credited correctly?
If you change your name due to marriage, divorce, or any other reason, immediately report the change to the Social Security Administration by filing Form SS-5 before making any tax payments under your new name. The IRS receives name and Social Security number data from the Social Security Administration, and payments made under a name that doesn't match SSA records can be rejected, delayed, or misapplied. When you file your 2023 tax return in 2024, if you made estimated payments using your former name, attach a statement to the front of your paper return (or include an explanation if e-filing) listing all estimated tax payments you made, showing both your old name and new name, along with your Social Security number and the dates and amounts of payments. This helps the IRS properly match and credit all payments to your return regardless of which name appeared on the payment. For future payments after your name change, use only your new name but the same Social Security number—your SSN never changes even when your name does.
All information sourced exclusively from IRS.gov official publications and guidance for tax year 2023, including Form 1040-ES and its instructions, Publication 505 (Tax Withholding and Estimated Tax), and official IRS web pages on estimated taxes and penalties. For your specific tax situation, consult the current year's forms and instructions or a qualified tax professional.
