Business Taxes & Estimated Payments (2025)

Who must pay estimated taxes, how to calculate quarterly payments, and safeharbor rules to avoid penalties.

Who Pays

Sole proprietors, partners, and S‑Corp shareholders with insufficient withholding should make quarterly estimated payments.

Safe Harbor

Pay 100% of prior year tax (110% for high earners) or 90% of current year tax to avoid underpayment penalties. Confirm thresholds for 2025.

Practical Tools

  • Use IRS Form 1040‑ES for individual estimated payments
  • Annualize income if business has seasonal variation
  • Keep records of estimated payments for credits on annual return