Third quarter estimated payments are due

If you’re advising clients who don’t have taxes automatically withheld, like gig workers, retirees, sole proprietors and investors, the third-quarter estimated tax payment deadline is fast approaching. This year, Sept.15 is the date to flag on every tax pro’s checklist. Let’s walk through why it matters, who needs to pay, how much and how to help your clients stay penalty-free.

Who should make payments?

Clients generally need to make estimated payments if both of the following apply:

• They expect to owe at least $1,000 when their return is filed (after subtracting withholding and credits).
• Their withholding and credits are expected to be less than 90% of the current year’s tax, or 100% of last year’s tax, whichever is lower.

That means self-employed individuals, retirees with significant investment income, partners in pass-through entities and gig economy workers should all be reviewed for estimated tax exposure.

How do you figure the payment?

Estimate using IRS tools, your favorite tax software or the Form 1040-ES worksheet. Tax professionals can anchor estimates to prior-year returns as a baseline, but be ready to adjust if current-year income swings significantly.

What’s the penalty risk?

Missing or underpaying estimated taxes opens the door to penalties, even if your client is due a refund later. The IRS calculates underpayment interest on the overdue portion, and clients should be forewarned to avoid “surprise” penalties at filing time.

Smooth, secure, smart payments

Let your clients know that paying online is best:

• IRS Direct Pay: payments can be set up on the website quickly with no registration
• EFTPS: great for repeat payments; requires enrollment but lets you schedule payments in advance

Other options like credit/debit card work, but note that third party processors charge card fees. Currently, the IRS will still accept checks for payment, but after Sept. 30, 2025, the IRS will not issue checks for benefits such as Social Security or Veterans payments.

Quick checklist for client conversations

1. Confirm if their income is subject to withholding or not
2. Estimate tax due for the year and determine whether they meet the $1,000 or safe-harbor thresholds
3. Use Form 1040-ES, IRS tools, or your tax software to calculate third-quarter payment
4. Choose a payment method, Direct Pay or EFTPS are preferred
5. Remind them to keep records, especially if irregular income or disaster relief applies

Clients in disaster areas

The IRS sometimes grants automatic extensions for disaster-affected taxpayers. For example, in 2024, people in states like Florida or Georgia had until Feb. 3, 2025, to make their third-quarter estimated payments. Always check IRS.gov for the “Around the Nation Disaster Relief” page before assuming deadlines apply.

Why this matters for NATP members

You know better than anyone: Estimated payments are a silent risk. It’s easy to overlook or underpay, but penalties cost clients and can erode trust. Sending a friendly reminder or running through your checklist during an engagement can save headaches later.