You Make the Call - Dec. 4, 2025

Question: In December 2025, tax professional Jordan Lee projects that Alex and their spouse will owe $30,000 of total tax on their joint 2025 Form 1040, U.S. Individual Income Tax Return. Through November, only $10,000 of federal income tax has been withheld, and no estimated tax payments have been made. On the 2024 return, total tax was $18,000, and the couple’s adjusted gross income exceeded the threshold where the 110% prior-year safe harbor applies, making the required annual payment under §6654 s $19,800 (110% of $18,000). Alex wants to wait and make a single $18,000 estimated tax payment on Jan. 15, 2026, instead of increasing 2025 wage withholding before Dec. 31. Will that January estimated payment by itself avoid a 2025 underpayment of estimated tax penalty? 

Answer: No. A single $18,000 estimated tax payment made on Jan. 15, 2026, is taken into account only on that date for purposes of §6654. It can’t retroactively cure earlier underpaid installments and, by itself, won’t avoid the 2025 underpayment of estimated tax penalty.  
By comparison, increasing federal income tax withholding from 2025 wages and year-end bonuses before Dec. 31 and reporting it on Form 1040 as tax withheld on wages under §31 means the additional withholding is treated under §6654(g) and Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, as if it were paid in equal installments throughout the year. This treatment can satisfy the 110% prior-year safe harbor and prevent the underpayment penalty.  
For a year-end checklist reminder: If a wage-earning client is behind on 2025 tax payments in December, fix the shortfall in payroll withholding before Dec. 31 instead of relying only on a last-minute Jan. 15 estimated payment.