The fourth quarter estimated tax payment is due January 15 of the following year
If you're self-employed, own a business, or have income that doesn't have taxes withheld automatically, the IRS expects you to pay estimated taxes four times a year. The fourth and final payment covers income earned October through December and is due January 15 of the next calendar year. This is a hard important date — the IRS charges penalties and interest if you miss it, even by one day.
The January 15 date applies whether you file your taxes on paper or electronically. If January 15 falls on a weekend or federal holiday, the important date moves to the next business day. In 2025, January 15 is a Wednesday, so that's your actual due date with no extension.
Unlike income tax filing, which you can extend to October 15, there is no extension for estimated tax payments. If you know you'll owe but can't pay by January 15, you still need to submit the payment on time to minimize penalties. You can pay in installments later, but the IRS calculates interest from the original due date.
Key Takeaways
- Fourth quarter estimated taxes are due January 15 of the following year, with no extensions available.
- You owe estimated taxes if you're self-employed, have business income, or receive income without automatic withholding, and expect to owe $1,000 or more when you file.
- Penalties and interest accrue when ready if you miss the important date, even if you pay the full amount later.
- You can pay online through IRS Direct Pay, by phone, by mail, or through a tax professional, and payment methods affect how quickly the IRS records your payment.
- If you underpaid in earlier quarters, the January payment is your final note to catch up before filing your annual return.
Who actually owes fourth quarter estimated taxes
You owe estimated taxes if you expect to owe $1,000 or more in federal income tax after accounting for any withholding or credits. This applies to self-employed people, business owners, freelancers, gig workers, investors, and anyone else with income sources that don't have taxes withheld by an employer.
If you're an employee with a W-2 job and your employer withholds taxes from your paycheck, you generally don't owe estimated taxes on that income. But if you have a side business, rental income, investment gains, or retirement distributions, you may owe estimated taxes even if you have a full-time job.
The IRS doesn't send you a bill for estimated taxes. You calculate what you owe based on your expected income for the year, then divide it into four equal payments. If your income is uneven across quarters, you can pay different amounts each quarter, but most people pay the same amount four times.
How to calculate your fourth quarter payment
Start with your total expected income for the year, subtract deductions and credits, and multiply by your tax rate. Divide that number by four to get your quarterly payment. If you underpaid in earlier quarters, your fourth quarter payment may need to be larger to catch up.
The easiest method is to use your previous year's tax return as a baseline. If your 2024 tax liability was $8,000, you'd pay roughly $2,000 each quarter in 2025 (assuming income stays similar). If you know your 2025 income will be significantly different, recalculate based on the new amount.
The IRS provides Form 1040-ES, which includes a worksheet to help you calculate estimated taxes. You can read it from IRS.gov or ask your tax preparer to calculate the amount for you. If you use tax software, many programs calculate estimated taxes automatically based on your income projections.
Payment methods and how long each takes to process
IRS Direct Pay is free and the fastest option. You go to IRS.gov, enter your payment information, and the IRS deducts the money from your bank account on the date you choose. The payment posts to your account within one business day. This method requires your Social Security number, tax filing status, and bank account details.
Credit or debit card payments go through a third-party processor (currently Worldpay, Link, and ACI Payments). You pay a convenience fee of 1.87% to 2.49% of the payment amount, and the IRS receives the payment within two to three business days. This is slower than Direct Pay and costs money, but it may be worth it if you're earning credit card rewards that exceed the fee.
Payment by phone works through the same third-party processors and carries the same fees and timeline as card payments. You call the processor's number (listed on IRS.gov) and provide your payment details over the phone.
Mail payments take the longest. You write a check, include Form 1040-ES with your payment, and mail it to the IRS address for your state. The IRS typically receives mail within 7 to 10 business days, and processing takes another 2 to 3 weeks. The postmark date is what matters for the important date, not the date the IRS receives it, so mail your check by January 15.
If you use a tax professional or accountant, they can submit your payment on your behalf through their own systems, which often process faster than individual payments.
What happens if you miss the January 15 important date
The IRS charges a failure-to-pay penalty of 0.5% of the unpaid amount per month, plus interest. Interest is calculated daily at the federal rate plus 3%, which changes quarterly. If you owe $2,000 and miss the important date by one month, you'll owe roughly $10 in penalties plus interest.
The penalty is smaller if you pay within a few days of the important date, but it still accrues from January 15 onward. There is no grace period. If you realize you'll miss the important date, pay as soon as you can — the sooner you pay, the less interest accumulates.
Missing estimated tax payments can also trigger an underpayment penalty when you file your annual return. This penalty applies if your total payments for the year (including withholding) don't meet a threshold based on your prior year's tax or 90% of your current year's tax, whichever is smaller. You can't avoid this penalty by paying late, but you can reduce it by paying the shortfall as soon as you realize it exists.
How to handle underpayment across multiple quarters
If you underpaid in the first three quarters, your fourth quarter payment is your final note to reduce the underpayment penalty. Calculate how much you should have paid total by January 15, subtract what you've already paid, and pay the difference with your fourth quarter payment.
For example, if you should have paid $8,000 total ($2,000 per quarter) but only paid $5,000 in the first three quarters, your fourth quarter payment should be $3,000 to reach the $8,000 total. This won't eliminate the underpayment penalty entirely — the IRS calculates it based on how long the money was underpaid — but it will reduce it.
When you file your 2025 tax return in April 2026, you'll report all four quarterly payments. The IRS will calculate whether you met the underpayment threshold and assess any remaining penalty. You can't change this after filing, so it's important to pay as much as you can by January 15.
Frequently Asked Questions
What if January 15 falls on a weekend or holiday?
The important date moves to the next business day. If January 15 is a Saturday, you have until Monday, January 17. The IRS website lists the actual important date each year, so check there if you're unsure.
Can I pay my fourth quarter estimated taxes with a credit card to earn rewards?
Yes, but you'll pay a 1.87% to 2.49% convenience fee. If your credit card earns 2% cash back, the fee roughly cancels out the reward. It's worth it only if your card earns more than the fee or if you're meeting a spending threshold for a bonus.
Do I need to file a separate form for each quarterly payment?
No. You report all four payments on your annual tax return using Form 1040. You don't file anything quarterly — you just pay and keep records of the payments.
What if I can't pay the full amount by January 15?
Pay whatever you can by the important date to minimize penalties. The IRS charges interest on the unpaid balance from January 15 onward, but paying something is better than paying nothing. You can set up a payment plan for the remainder after you file your return.
Does paying estimated taxes affect my income tax refund?
Yes. Estimated tax payments reduce the amount of tax you owe when you file, which can increase your refund or reduce the amount you owe. The IRS credits all four quarterly payments against your total tax liability for the year.