Form 1040-ES: Estimated Tax for Individuals (2025)
What Form 1040-ES Is For
Form 1040-ES is the IRS form you use to calculate and pay estimated taxes on income that is not subject to automatic tax withholding. When you work as a traditional employee, your employer withholds taxes from each paycheck and sends them to the IRS throughout the year. However, many types of income do not have taxes automatically withheld, which means you are responsible for paying those taxes yourself in quarterly installments.
This form is specifically designed for income such as earnings from self-employment and gig economy work, interest and dividends, rental income, alimony received, prizes and awards, and the taxable portion of unemployment compensation or Social Security benefits. The form includes worksheets that help you estimate your total annual income, calculate the tax you will owe, and determine how much you need to pay each quarter to avoid penalties.
Form 1040-ES is not a tax return that you file with the IRS. Rather, it is a calculation tool that comes with payment vouchers you can use if you choose to pay by check or money order. Many taxpayers now pay electronically, but the form itself remains essential for figuring out how much to pay and when.
When You’d Use Form 1040-ES
You generally must use Form 1040-ES if you expect to owe at least $1,000 in tax for 2025 after subtracting your withholding and refundable credits, and you expect your withholding and refundable credits to be less than the smaller of either 90% of the tax shown on your 2025 return or 100% of the tax shown on your 2024 return. There is an important exception for higher-income taxpayers: if your adjusted gross income for 2024 was more than $150,000 (or $75,000 if married filing separately), you must substitute 110% for that 100% figure.
You do not need to make estimated tax payments if you had no tax liability for 2024, were a U.S. citizen or resident alien for all of 2024, and your 2024 tax year covered all 12 months. Additionally, if you receive salaries and wages, you may be able to avoid making estimated payments by having your employer withhold more tax from your paycheck using Form W-4. Similarly, retirees can adjust withholding from pensions using Form W-4P.
There is no concept of filing Form 1040-ES late or filing an amended version in the traditional sense. If you initially estimated your income incorrectly, you simply recalculate your estimated tax using a new worksheet and adjust your remaining quarterly payments accordingly. If you underpay throughout the year, you may owe an underpayment penalty when you file your annual tax return, but you do not amend the 1040-ES itself.
Key Rules or Details for 2025
Pay-As-You-Go and Due Dates
The U.S. tax system operates on a pay-as-you-go basis, which means taxes must be paid throughout the year as you earn income, not all at once when you file your return. For 2025, the tax year is divided into four payment periods with specific due dates: April 15, June 16, September 15, and January 15, 2026. However, if you file your complete 2025 tax return and pay all tax due by February 2, 2026, you do not need to make the January 15 payment.
Safe Harbor Rules
The safe harbor rules are particularly important because they protect you from penalties even if you end up owing more tax than expected. You will generally avoid penalties if your total payments throughout the year equal at least 90% of your current year's tax or 100% of last year's total tax (110% if your prior year adjusted gross income exceeded $150,000). Special rules apply to farmers and fishermen, who can substitute two-thirds (approximately 66.67%) for the 90% requirement.
Identification and Joint Payments
When making payments, you must use your Social Security number even if it does not currently authorize employment or if you later lose employment authorization. If you previously used an Individual Taxpayer Identification Number but have since been issued an SSN, you must switch to using your SSN. Joint estimated tax payments are generally allowed for married couples filing jointly, but not if either spouse is a nonresident alien, if you are separated under a decree of divorce or separate maintenance, or if you have different tax years.
Step-by-Step (High Level)
Step 1: Gather Prior-Year and Current Information
The process begins with gathering your information, including your 2024 tax return, the 2025 Estimated Tax Worksheet from Form 1040-ES, the 2025 Tax Rate Schedules, and information about any income changes you expect for the current year. You will need to consider recent tax law changes, particularly the increased standard deduction for 2025: $30,000 for married filing jointly, $22,500 for head of household, and $15,000 for single or married filing separately.
Step 2: Estimate 2025 Adjusted Gross Income
Next, complete the worksheet by estimating your expected adjusted gross income for 2025. This requires projecting all your income sources and accounting for any above-the-line deductions, including the deduction for self-employment tax. If you are self-employed, you will use the Self-Employment Tax and Deduction Worksheet to calculate both your self-employment tax and the allowable deduction, using only 92.35% of your net profit for self-employment tax calculations.
Step 3: Compute Expected Total Tax
Calculate your expected total tax by subtracting your standard or itemized deductions from your adjusted gross income, applying the appropriate 2025 tax rate schedule, and adding any additional taxes such as self-employment tax, Net Investment Income Tax, or Additional Medicare Tax. Then subtract any credits you expect to claim, such as the child tax credit or education credits.
Step 4: Determine Required Annual Payment
Determine your required annual payment by comparing 90% of your expected 2025 tax with 100% of your 2024 tax (or 110% if you were a higher earner in 2024), and use the smaller amount. Subtract any withholding you expect from wages, pensions, or other sources. Divide the result by four to determine your quarterly payment amount, though you can make more frequent payments if that is easier.
Step 5: Choose a Payment Method and Pay
Finally, make your payments using one of several methods. You can pay online through IRS Direct Pay, your IRS online account, by debit or credit card, or through the Electronic Federal Tax Payment System. You can also pay by phone, through a mobile device using the IRS2Go app, or by mailing a check or money order with a payment voucher to the address specified for your state.
Common Mistakes and How to Avoid Them
One of the most frequent errors is failing to account for all sources of income when calculating estimated tax. Many taxpayers forget to include investment income, rental property income, or the taxable portion of Social Security benefits. To avoid this, review your prior year's return carefully and consider any new income sources you acquired during the current year.
Another common mistake is using outdated information from your prior year's return without adjusting for current year tax law changes. For 2025, the standard deduction amounts have increased, the Social Security wage base rose to $176,100, and various credit amounts have been indexed for inflation. Always review the current year's tax rates and provisions before finalizing your calculations.
Many taxpayers miscalculate self-employment tax by forgetting that only 92.35% of net self-employment income is subject to self-employment tax, or they forget to claim the deduction for one-half of self-employment tax when calculating adjusted gross income. Using the Self-Employment Tax and Deduction Worksheet provided with Form 1040-ES prevents these errors.
Sending payments to the wrong address is surprisingly common, particularly because the address for estimated tax payments differs from the address where you file your annual return. Always use the specific address listed in the Form 1040-ES instructions for your state, and note that only the U.S. Postal Service can deliver to P.O. box addresses, not private delivery services.
Higher-income taxpayers frequently overlook the 110% rule, calculating their safe harbor payment based on 100% of prior year tax when they should be using 110%. If your 2024 adjusted gross income exceeded $150,000 ($75,000 if married filing separately), you must increase your prior-year safe harbor to 110% to avoid potential penalties.
Finally, many people make unequal payments or miss payment deadlines entirely. While you can make payments more frequently than quarterly, you must ensure that the cumulative amount paid by each quarterly deadline meets the required payment for that period. Setting up automatic payments through EFTPS or using your IRS online account can help you stay on schedule.
What Happens After You File
Since Form 1040-ES is a payment form rather than a filing, there is no processing or acknowledgment in the traditional sense. Your payments are credited to your tax account under your Social Security number. You can monitor your payments by accessing your online account at IRS.gov/Account, where you can view payment history, see any scheduled payments, and check your current balance.
If you make estimated payments throughout 2025, you will report the total of all these payments on your 2025 Form 1040 when you file it in 2026. The IRS will apply your estimated payments against your total tax liability for the year, and you will either owe additional tax, receive a refund, or break even depending on whether your payments matched your actual tax.
If you underpaid your estimated taxes or paid late, the IRS will calculate an underpayment penalty based on the amount of the underpayment, the period it was due and unpaid, and the applicable interest rate. This penalty is calculated separately for each payment period. You will typically receive a notice explaining any penalty owed, though you may choose to calculate it yourself using Form 2210 and include it with your return.
The penalty can be reduced or waived under certain circumstances. If the underpayment resulted from a casualty, disaster, or other unusual circumstance and imposing the penalty would be inequitable, you may request a waiver. The penalty may also be reduced if you or your spouse retired after age 62 or became disabled during the tax year or preceding year and had reasonable cause for the underpayment, or if your income was received unevenly during the year and you can demonstrate this using the annualized income installment method on Form 2210, Schedule AI.
FAQs
Can I make estimated tax payments even if I am not required to?
Yes, you can make voluntary estimated tax payments even if you do not meet the requirements. This can be helpful if you want to avoid owing a large amount when you file your return, or if you prefer to spread your tax payments throughout the year rather than paying all at once. There is no penalty for overpaying your estimated taxes; you will simply receive a larger refund or can apply the overpayment to the following year's estimated tax.
What if my income changes significantly during the year?
If your income increases or decreases substantially, you should recalculate your estimated tax using a new worksheet and adjust your remaining payments. If your income is received unevenly throughout the year—for example, if you operate a seasonal business or receive a large capital gain late in the year—you may be able to use the annualized income installment method to lower or eliminate the amount of your required estimated tax payment for one or more periods. This method is explained in Publication 505 and calculated on Form 2210, Schedule AI.
Do I need to use the payment vouchers that come with Form 1040-ES?
No, the payment vouchers are only necessary if you choose to pay by check or money order through the mail. Most taxpayers now pay electronically, which is faster, more secure, and provides immediate confirmation of payment. Electronic options include IRS Direct Pay, paying through your online account, debit or credit card payments, the Electronic Federal Tax Payment System, and the IRS2Go mobile app. However, if you do choose to mail payments, you must use the vouchers and send them to the correct address for your state.
What happens if I pay too much in estimated taxes?
If your estimated payments plus any withholding exceed your actual tax liability for the year, you will receive a refund when you file your tax return. Alternatively, you can elect to have all or part of the overpayment applied as a credit toward your estimated tax for the following year. Once you make this election on your tax return, you cannot change it later, so consider your cash flow needs carefully before deciding to apply an overpayment forward.
Are estimated tax payments different for self-employed individuals versus investors?
The form and process are the same regardless of income source, but self-employed individuals have additional considerations. They must calculate and include self-employment tax in their estimated payments, which includes both the employer and employee portions of Social Security and Medicare taxes. Self-employed individuals can also deduct one-half of their self-employment tax when calculating adjusted gross income. Investors primarily need to account for income tax on investment earnings but generally do not owe self-employment tax unless they are engaged in trading as a business.
Can married couples make joint estimated tax payments if they plan to file separately?
No, if you plan to file separate returns for 2025, you should make separate estimated tax payments using separate vouchers. You cannot make joint estimated tax payments if either spouse is a nonresident alien, if you are separated under a decree of divorce or separate maintenance, or if you have different tax years. List your name and Social Security number in the same order on your vouchers as you will on your eventual tax return.
What if I move to a different state during the year?
Continue sending your estimated tax payments to the IRS address designated for your current state of residence. The address for estimated tax payments is based on where you live, not where you earned your income. If you change your address, you should file Form 8822 to update your records with the IRS. When you make payments after moving, use the payment address for your new state as listed in the Form 1040-ES instructions. The IRS will properly credit all payments to your account regardless of which address they were sent to, as long as your Social Security number is correct on the payment.
Sources
Sources: All information derived from official IRS publications including Form 1040-ES (2025), About Form 1040-ES, Estimated Taxes guidance, and Underpayment of Estimated Tax Penalty information.
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