Tax Tip Tuesday: Final Quarter Estimated Tax Tips

The year’s winding down — but before you celebrate, make sure your fourth-quarter estimated tax strategy is solid. Planning now can help you avoid penalties, reduce surprises in April, and keep more of your hard-earned money where it belongs.

Know Your Final Payment Deadline

The last estimated tax payment for 2025 is due January 15, 2026. You can pay using EFTPS, IRS Direct Pay, or your state’s online payment system (like CA WebPay for California residents). If you file your 2025 return and pay the balance by January 31, 2026, you may skip that January payment entirely.

Review Your 2025 Income So Far

If your income changed this year — maybe a big project, side hustle, or capital gain — update your year-to-date numbers. You may need to adjust your final payment to meet the IRS safe harbor rule:

• Pay 90% of your 2025 tax liability, or

• Pay 100% of your 2024 tax liability (110% if AGI was over $150,000).

  
  

Consider State Estimates Too

Don’t forget state payments! States like California, New York, and Virginia have their own estimated tax deadlines, usually mirroring federal dates. Check your state’s portal or talk with your tax professional if you split time between states.

Review Withholding and Credits

If you’re an employee with side income, you may be able to adjust your Form W-4 to cover any shortfall instead of sending in a separate estimated payment. Likewise, track refundable credits (like the Child Tax Credit or Premium Tax Credit) — these can reduce what you owe and help you avoid overpaying.

Prepare for Year-End Tax Moves

Final quarter is also the time to:

• Make retirement plan contributions (SEP IRA, Solo 401(k), etc.)

• Prepay deductible expenses for your business if you’re a cash-basis filer

• Harvest tax losses before December 31 to offset gains

Each of these can lower your taxable income and fine-tune your final estimate. A quick check-in now can save you from costly penalties later. Gather your income totals, review your safe harbor amount, and make your last estimated payment by January 15. Need a hand figuring out how much to pay? MKHS Tax Group can help you calculate your final quarter estimate — so you can understand more, stress less, and file with confidence.📩 Email info@mkhstaxgroup.com