Estimated Taxes

How to Send Estimated Tax Payments and Due Dates

Figuring out how much estimated tax to pay is the hard part. Once you have your payment amount, you can send in estimated payments by check, pay by credit card, or use the Treasury Department's online bill payment system.

Paying Estimated Taxes by Check

Paying estimated taxes by check is pretty easy. Just make sure to use the 1040-ES payment vouchers (pdf). Make the check payable to the "United States Treasury." In the memo field of the check, be sure to write your Social Security Number and indicate the year for which you are paying, for example "2008 Form 1040-ES."

Avoid making the check payable to the IRS or I.R.S. as some thieves have confiscated these checks and altered the name to J.R.Smith or MRS Smith or some other permutation. You can prevent this sort of theft by always writing out "United States Treasury," as that cannot be easily altered.

Paying Estimated Taxes by Credit Card

To pay by credit card, you'll need to use one of two authorized payment services: Official Payments and Pay1040. Both charge a processing fee of 2.49% (in addition to the amount of tax you are paying). This additional amount is paid directly to the processing company and isn't apart of your estimated tax payment.

Paying by credit card is very convenient, but I usually don't recommend it because there's a convenience fee involved, and you'll have to pay finance charges on top of that. Still, paying by credit card can help avoid any late payment penalties charged by the IRS.

Paying Estimated Taxes by Online Bill Pay

The Treasury Department operates an online bill payment system for taxes. It's called the Electronic Federal Tax Payment System, or EFTPS for short. I use EFTPS personally, and the service works very smoothly. It can take a few weeks to get fully registered with the service, but once you are set up, you will be able to schedule estimated payments from your checking account very quickly. As an accountant I like it when clients use EFTPS, because clients can print out a report showing all their estimated payments for the year.

To pay your estimated taxes, simply login and schedule an estimated payment. You can indicate the dollar amount and the date you want the payment withdrawn from your bank account.

Estimated Tax Deadlines

Estimated tax payments are due quarterly on the following days:

• April 15th,
• June 15th,
• September 15th, and
• January 15th.

Some taxpayers pay more frequently than this. Some people have set up the monthly payments by EFTPS so that a fixed amount of tax is paid as part of their monthly budget. And if you skip a payment, you may want to adjust your subsequent estimated payment to cover the shortfall.