Staying Ahead: Understanding the Fourth-Quarter Tax Payment

Sugam Sharma

As the new year approaches, it's crucial to keep track of key tax deadlines to ensure a smooth financial transition. One important reminder for taxpayers is that the fourth-quarter estimated tax payment for 2025 is due by January 15, 2026.

Who Needs to Make an Estimated Payment?

If you've received income this year from self-employment, rental properties, interest, dividends, or even unemployment compensation, and haven’t had taxes withheld, you may be obligated to make an estimated payment.

The Reason Behind Estimated Tax Requirements

The IRS follows a “pay-as-you-go” tax system, meaning taxes should be paid as income is earned, not just at year-end. This ensures that taxes are managed consistently throughout the year. For those without sufficient withholdings or self-employed individuals, making quarterly payments can help you avoid tax-time surprises. These payments typically cover your federal income and, in some instances, self-employment taxes.

Key Details of the Fourth Quarter Payment

The due date is January 15. This payment relates to income earned in September, October, November, and December. To make your payment, options include using the IRS Direct Pay site, managing through your IRS account online, or mailing a check with a Form 1040-ES voucher.

Consequences of Missing Payments

Failing to make required estimated payments can result in penalties from the IRS, even if you expect a refund upon filing your return. These penalties accumulate based on the overdue amount and the delay in payment. It's a misunderstanding to think one can catch up during tax season, which makes regular quarterly payments important.

Uncertain About Your Obligation?

If you're unsure whether you need to make an estimated payment, now is the perfect time for a review. Our team is ready to help you assess your annual income and determine whether an estimated tax payment is necessary.