If you have significant self-employment or other income outside of your W-2 paycheck that is not subject to witholding (interest, rents, dividends, alimony), you may need to send the IRS some money before the usual tax-filing time. This is my annual reminder to either slide in a last-minute payment for 2016 if needed, or plan ahead for four equal installments in 2017.
Here are the due dates for paying quarterly estimated taxes in 2017; one last one for 2016 tax year and four quarterly installments for 2017 tax year. This is for federal taxes only, state and local tax due dates may be different.
IRS Estimated Tax Payment Calendar for Individuals
|Tax Year / Quarter||Due Date|
|2016 Fourth Quarter||January 17, 2017* (Tuesday)|
|2017 First Quarter||April 18, 2017 (Tuesday)|
|2017 Second Quarter||June 15, 2017 (Thursday)|
|2017 Third Quarter||September 15, 2017 (Friday)|
|2017 Fourth Quarter||January 16, 2018 * (Tuesday)|
* You do not have to make the payment due January 17, 2017, if you file your 2016 tax return by January 31, 2017, and pay the entire balance due with your return. You do not have to make the payment due January 16, 2018, if you file your 2016 tax return by January 31, 2018, and pay the entire balance due with your return.
Who needs to pay estimated taxes?
In general, you must pay estimated tax for 2017 if both of the following apply:
- You expect to owe at least $1,000 in tax for 2017, after subtracting your withholding and refundable credits.
- You expect your withholding and credits to be less than the smaller of
- 90% of the tax to be shown on your 2017 tax return, or
- 100% of the tax shown on your 2016 tax return. Your 2016 tax return must cover all 12 months.
If you forget to pay (like I’ve done before), then you should make a payment as soon as possible even though it is late. This will minimize any penalty assessed.
How do I pay? When does the payment count?
- By check. Fill out the appropriate IRS Form 1040-ES voucher (last page of the PDF) and snail mail to the indicated address. The date of the U.S. postmark is considered the date of payment. No fees besides postage.
- By online bank transfer. You can store your bank account information and pay via electronic funds transfer at EFTPS.gov or call 1-800-555-4477. It takes a little while to set up an online account initially, so you’ll need to plan ahead. For a one-time payment, you can also use IRS Direct Pay which does not require a sign-up but it also doesn’t store your bank account information for future payments. Both are free (no convenience fees). The date of payment will be noted online.
- By debit or credit card. Here is page of IRS-approved payment processors. Pay by phone or online. Fees will apply, but the payment will count as paid as soon as you charge the card. You may also earn rewards on your credit card.
The following credit cards currently have the ability to offer rewards equal or greater than 1.87%, meaning you could theortically make money by paying your taxes with them. Please read my card-specific reviews for details.
- Citi Double Cash Review
- Fidelity Rewards Visa Credit Card Review
- BankAmericard Travel Rewards Credit Card Review
How much should you pay in estimated taxes? You’ll need to come up with an expected gross income and then estimate your taxes, deductions, and credits for the year. The PDF of Form 1040-ES includes a paper worksheet to calculate how much in quarterly estimated taxes you should pay. You can also try online tax calculators like this one from H&R Block to estimate your 2016 tax liability, and divide by four quarters.