The fourth estimated tax payment is due December 31 of the tax year

If you owe federal income tax and do not have an employer withholding from paychecks, you make four estimated tax payments spread across the year. The final one is due on December 31. That is the hard important date — if you miss it, you owe penalties and interest on the unpaid amount, even if you file your full tax return on time in April.

The IRS calls these payments "estimated" because you calculate them yourself based on your expected income for the year. You do not wait for a bill. You send money in on a schedule the IRS sets, and then reconcile what you actually owed when you file your return.

Most people who make estimated payments are self-employed, freelancers, or have income from investments, rental property, or a business. If you have a regular job with withholding, you probably do not need to make estimated payments — your employer already sends the IRS money on your behalf.

Key Takeaways

  • The four estimated tax payment dates are April 15, June 15, September 15, and December 31 of the tax year.
  • You calculate each payment yourself based on your expected income and tax rate, not on a bill from the IRS.
  • Missing the December 31 important date triggers penalties and interest, even if you file your return on time in April.
  • You can pay estimated taxes online through IRS Direct Pay, by mail, or through a tax professional's payment system.
  • If your income changes during the year, you can adjust your remaining payments — you do not have to stick with the original four equal amounts.

The four payment dates and what each covers

The IRS divides the tax year into four quarters, and you send one payment at the end of each. The first three are due on the 15th of the month that ends the quarter: April 15 (for January through March income), June 15 (April through June), and September 15 (July through September). The fourth payment covers October through December and is due December 31.

Each payment is supposed to cover one quarter of your expected annual tax liability. If you expect to owe $4,000 for the year, you would normally send $1,000 with each payment. But if your income is uneven — say you earn most of it in the fall — you can send smaller payments early and a larger one in December, as long as the total meets the IRS's safe harbor rules by year-end.

If you miss a quarterly important date, you can still make that payment late, but you will owe a penalty on the shortfall for the time it was unpaid. The penalty is calculated daily, so the longer you wait, the more it costs.

How to calculate what you owe for the fourth quarter

To figure out your December 31 payment, you need to know your expected total tax for the year and subtract what you have already paid in the first three quarters. If you earned $50,000 so far and expect to earn $10,000 more by year-end, and your total tax liability is $12,000, and you have already sent in $9,000 across three payments, your fourth payment would be $3,000.

The tricky part is that you have to estimate your income and tax rate yourself. The IRS does not tell you what to pay — it tells you when to pay. If you are self-employed, you also owe self-employment tax (Social Security and Medicare), which adds roughly 15% on top of your income tax. A tax professional or tax software can walk you through the calculation, but you are responsible for getting it right.

If you underpay significantly, you will owe the difference plus penalties when you file your return in April. If you overpay, you get a refund or can carry the excess forward to next year's estimated payments.

Payment methods and processing time before December 31

You have several ways to send your payment to the IRS. IRS Direct Pay is free and lets you pay directly from a bank account through the IRS website. The payment posts when ready, so if you pay on December 31, it counts as on-time. You can also pay by credit or debit card through an approved payment processor, though they charge a fee (usually 1.5% to 2% of the payment).

If you mail a check, it must be postmarked by December 31 to count as on-time. A check postmarked January 1 or later is late, even if it arrives at the IRS office in early January. The IRS processes mailed payments slowly, so allow two to three weeks for it to show up in your account. For this reason, mailing is risky if you are close to the important date.

You can also pay through a tax professional or tax software platform. They typically charge a fee and may offer payment plans, though the IRS itself does not offer installment plans for estimated taxes — you either pay in full or owe penalties.

What happens if you miss the December 31 important date

If you do not pay by December 31, the IRS charges you a penalty called the underpayment penalty. The rate changes quarterly and is based on the federal short-term interest rate plus 3%. For 2024, the rate is roughly 8% per year, calculated daily on the unpaid amount. The longer you wait to pay, the more the penalty grows.

You also owe interest on the unpaid tax itself, separate from the penalty. Interest accrues from the original due date (December 31) until you pay, and it compounds daily. If you owe $3,000 and do not pay until April, you might owe an additional $200 to $300 in interest and penalties combined.

The penalty applies even if you file your full tax return on time in April and pay the full amount owed. The IRS penalizes late quarterly payments separately from late annual returns. The only way to avoid the penalty is to pay by the important date or to meet one of the IRS's safe harbor rules, which allow you to avoid penalties if you paid at least 90% of your current year tax or 100% of your prior year tax (110% if your prior year income was over $150,000).

Adjusting your payments if your income changes

You do not have to make four equal payments. If you realize in October that you will earn less than you expected, you can reduce your fourth payment. If you earn more, you can increase it. The IRS only requires that your total payments for the year meet the safe harbor threshold by December 31.

To adjust, recalculate your expected annual income and tax, subtract what you have already paid, and send the difference with your fourth payment. You do not need to file a form or notify the IRS in advance — just send the adjusted amount. When you file your return in April, the IRS will reconcile the total and either refund the overage or bill you for any shortfall.

If you realize in November that you will owe much more than expected, you can still increase your December 31 payment to avoid penalties. Paying more than required is always safe; paying less than the safe harbor threshold is what triggers penalties.

Frequently Asked Questions

Can I pay my estimated tax on January 1 instead of December 31?

No. The important date is December 31, and a payment made on January 1 is late. You will owe penalties and interest on the unpaid amount for the one day it was late, even though it is only one day. If you are paying by mail, the postmark date is what counts, so you must mail it by December 31.

What if December 31 falls on a weekend or holiday?

If December 31 is a Saturday or Sunday, the important date moves to the next business day. If it is a holiday, the important date moves to the next business day after that. The IRS publishes the adjusted important date each year on its website. For 2024, December 31 is a Tuesday, so the important date is December 31.

Do I have to make all four payments, or can I pay it all at once in December?

You can pay it all at once in December if you want, but you will still owe underpayment penalties for the first three quarters. The IRS penalizes you for not having paid those amounts by their original due dates. It is cheaper to spread the payments across the year or to pay early if you know your income in advance.

What if I did not make the first three payments — is it too late to start with the fourth?

You can still make the fourth payment by December 31, but you will owe penalties on the first three missed payments. When you file your return in April, the IRS will calculate the total underpayment penalty for all four quarters and bill you for it. Paying the fourth payment on time does not erase the penalties on the earlier ones.

Can I use a credit card to pay my estimated tax?

Yes, but you will pay a processing fee of roughly 1.5% to 2% of the payment amount. The IRS does not charge the fee — an approved payment processor does. If you pay $3,000 by credit card, you might pay an extra $45 to $60 in fees. IRS Direct Pay from a bank account is free and is usually the cheapest option.