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Everything You Need to Know About the 2025 Form 1040-ES
If you’re self-employed, a freelancer, or earn money outside of a regular paycheck, you’ve probably heard of Form 1040-ES. But what exactly is it, and why does the IRS care if you use it?
Form 1040-ES is the form people in the United States use to pay estimated taxes throughout the year. This mostly applies to folks who don’t have taxes automatically taken out of their paycheck, like gig workers, business owners, or anyone earning dividends, interest, rental income, or retirement income with no tax withholding.
For 2025, the IRS made a few minor updates, but the core purpose remains the same: making sure you pay your fair share of taxes on time so there are no surprises at Tax Day. Whether you’re managing your business, growing your wealth, or living off investments, this guide will walk you through everything you need to know.
What Is Form 1040-ES?
Form 1040-ES is used to figure out and send in estimated tax payments on income that isn’t taxed automatically. This helps the government fund public services like Social Security, schools, roads, and more—without waiting for your annual tax return.
Types of income that may require estimated payments:
- Self-employment earnings
- Interest, dividends, and capital gains
- Rental income from properties
- Retirement distributions when no taxes are taken out
If you receive unemployment benefits, pensions, or any type of factor income outside regular wages, you might need to pay estimated taxes as well.
How It’s Different from Form 1040
Form 1040 is the form you use to report your total income and calculate your final tax bill once a year, usually in April.
In contrast, Form 1040-ES is for sending in tax payments four times a year. Think of it as pre-paying your taxes bit by bit, instead of all at once.
Who Needs to File Form 1040-ES in 2025?
So who needs to worry about this form? The IRS has a general rule: if you expect to owe $1,000 or more in federal taxes after subtracting your withholding and tax credits, you should be making estimated payments.
Here’s a simple checklist:
- You expect your total tax owed in 2025 to be over $1,000.
- Your tax withholding won’t cover at least 90% of this year’s total tax or 100% of your 2024 tax (110% if your adjusted gross income (AGI) was over $150,000).
- You had no tax liability in 2024 or earned less than the filing requirement? You’re off the hook.
Common filers include:
- Freelancers and contractors
- Gig workers (Uber, DoorDash, etc.)
- Landlords
- Investors
- Retirees with taxable pension or dividend income
If you’re in one of these groups and not paying quarterly, you might be surprised with a penalty or large bill in April.
How to Calculate Your Estimated Tax Payments
Let’s walk through how to figure out your payments using the IRS 1040-ES worksheet. It might sound complicated, but we’ll keep it simple.
Step-by-Step Guide
- Estimate your income for the year (from all sources: self-employment, rentals, investments).
- Subtract deductions — you can choose the standard deduction or itemized deductions.
- Apply the 2025 tax rate to find your estimated tax.
- Add self-employment tax (15.3%) if you’re self-employed.
- Subtract any tax credits (like the child tax credit or earned income credit).
- Subtract your withholdings (if you have any).
- Divide what’s left by 4 to get your quarterly payment.
Safe Harbor Rule
To avoid penalties, many people use the “safe harbor” method—just pay:
- 100% of your 2024 tax (or 110% if you earned over $150k),
- or 90% of your expected 2025 tax.
Seasonal or uneven income?
Use the annualized income method instead. This helps people with seasonal jobs, like landscapers or retail store owners, to match payments to actual earnings.
2025 Estimated Tax Payment Deadlines
Here’s when you need to send your payments:
- 1st Quarter: April 15, 2025 (for Jan–Mar income)
- 2nd Quarter: June 16, 2025 (note: June 15 is a Sunday)
- 3rd Quarter: September 15, 2025
- 4th Quarter: January 15, 2026
If you file your 2025 tax return by January 31, 2026, and pay the full amount owed, you can skip the January 15 payment.
Late or missed payments can result in IRS penalties, so mark your calendar!
How to Make 1040-ES Payments
Paying your estimated taxes is easier than ever with several options available:
Online (Fastest & Easiest)
- IRS Direct Pay (from your bank account)
- EFTPS (Electronic Federal Tax Payment System)
- IRS2Go app (pay from your phone)
By Mail
- Print and send payment with the paper voucher included in Form 1040-ES.
- Make checks or money orders payable to “United States Treasury.”
- Use the correct ZIP Code for your state.
By Phone or Card
- Pay with a credit or debit card using third-party processors (fees may apply).
- Confirm details on the IRS website.
Overpaid? You can choose a tax refund or roll the extra amount into next year’s estimated taxes.
Common Mistakes to Avoid
Even small slip-ups can lead to penalties or stress later on. Watch out for:
- Underestimating your income leads to underpaying taxes.
- Missing deadlines, quarterly due dates matter!
- Ignoring self-employment tax, it’s easy to forget the 15.3% if no one’s withholding it for you.
- Mailing to the wrong address, each state has its own mailing location.
- Not updating payments when income increases.
Keep good records, review income regularly, and adjust as needed.
Penalties and How to Avoid Them
The IRS charges penalties for underpaying or paying late—even if it’s unintentional.
Here’s what helps:
- Stick to the safe harbor rule.
- Adjust payments if your income changes mid-year.
- File Form 2210 if you qualify for an exception (like a natural disaster, retirement, or disability).
If you’re unsure, tax software like TurboTax or H&R Block can help with calculations.
State Estimated Taxes
The federal government isn’t the only one collecting. Many states also require estimated tax payments, including:
- South Carolina
- California
- New York, and others
Check your state’s Department of Revenue for deadlines and rules. They often use forms that mirror the IRS version but have different instructions.
Conclusion
And there you have it—everything you need to know about the 2025 Form 1040-ES. Whether you’re running your own business, investing in your future, or just earning income outside a paycheck, understanding this form can help you stay on top of your finances and avoid surprises at tax time.
Estimated taxes don’t have to be scary. With the right tools and a little planning, it’s just another part of managing your money wisely.
Need help getting started? BIT Accounting is here to guide you through your tax journey—so you can focus more on growing your business and less on tax worries.
FAQs
1: What happens if I don’t file Form 1040-ES?
You could face penalties for underpayment, plus interest.
2: Do I still need to file Form 1040 in April?
Yes! Form 1040-ES helps you pay taxes throughout the year, but you still file Form 1040 annually to report everything.
3: Can I pay estimated taxes once a year instead?
It’s not recommended unless you’re paying the full amount by April 15. The IRS expects payments to be spread out quarterly.
4: What if my income changes during the year?
Update your estimates and adjust future payments. You can use the annualized income method for uneven income.
5: Can I skip payments if I had no tax due last year?
Yes, if you had zero tax liability in 2024 and meet certain income thresholds, you may be exempt this year.
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