2025 Estimated Taxes for Individuals, Trusts, and Estates

The Internal Revenue Service requires you to pay your 2025 tax as you earn or receive income during the year through either withholdings or estimated taxes. If you don’t pay enough throughout the year, you will be subject to underpayment of estimated tax penalties and interest.

When are individuals, trusts, and estates required to pay estimated tax?

Individuals, trusts, and estates are required to make estimated tax payments if the estimated tax for 2025 is expected to be at least $1,000 after subtracting withholdings and refundable credits and the expected withholdings and refundable credits are smaller of 90% of the actual 2025 tax reported on the 2025 tax return or 100% of the 2024 tax reported on the 2024 tax return (110% for high income earners - see below). There is an exception if the individual, trust or estate did not have to file a 2024 tax return or if their 2024 tax liability was zero.

There are two more exceptions for trusts and estates where 2025 estimated taxes would not be required: 1) if the tax year ending date is less than two years post the decedent’s date of death for the decedent’s estate return or 2) a trust that was treated as owned by the decedent if the trust will receive the residue of the decedent’s estate under the will with a tax year ending date that is less than two years post the decedent’s date of death.

How much are you required to pay?

Individuals, trusts and estates are required to pay estimated taxes for 2025 in equal installments of the smaller of 90% of the actual 2025 tax reported on the 2025 tax return or 100% of the 2024 tax reported on the 2024 tax return. For individuals, trusts, and estates with adjusted gross income that was more than $150,000 ($75,000 if the 2025 filing status is single or married filing separately), the 100% is replaced with 110% of the 2024 tax. While the estimates are due in equal installments, it is possible to use another method to calculate the quarterly installments due called the annualized income installment method. This method calculates the quarterly estimate due based on the income per quarter. This is helpful for taxpayers that have a large change in income or deductions in a particular quarter to help better align the estimate tax due with the associated quarter.

When are you required to pay?

For individuals, trusts, and calendar yearend estates, the quarterly payments are due on the following dates in 2025:

                1st Quarter: April 15, 2025

                2nd Quarter: June 16, 2025

                3rd Quarter: September 15, 2025

                4th Quarter: January 15, 2026

If there is an estate with a fiscal year end, the quarterly installments would be due the 15th day of the 4th month, 6th month, 9th month, and the 1st month in the new year.

How do you pay?

There are various methods to make your estimated tax payments. You can send in a check along with a voucher, pay online, pay by phone, through your online account, or using the Electronic Federal Tax Payment System (EFTPS).

What is the penalty assessed?

If you underpay your quarterly estimate taxes, you will be assessed a penalty per quarter based on the amount that was underpaid for the quarter. The rate for the first quarter of 2025 is currently set at 7%. Interest will also be calculated on the penalty amount. There are certain situations where these penalties can be reduced or removed by demonstrating a reasonable cause (serious illness, family member’s death, local disaster, etc.) for underpaying.

Proper estimate planning is important to not only manage your cash flow, but to also eliminate any penalties and interest that could have been avoided. It is important to consider any large changes in your annual income when planning for 2025.