Quarterly Estimates in 2025: Why Tax Strategy Isn’t Just a Guessing Game Anymore 

In a post–Big Beautiful Bill Act world, making quarterly estimated tax payments isn’t about plugging numbers into Form 1040-ES and hoping for the best. It’s about precision, planning, and not paying more than necessary, earlier than you need to. 

For me, tax strategy must include estimated payments and withholding adjustments, because nothing ruins a good plan faster than penalties and interest. If you’re still running estimates the same way you did five years ago, you may be prepaying more than you need. 

What Changed with the Big Beautiful Bill Act? 

The tax landscape got a major overhaul with the Big Beautiful Bill Act. Yes, there were headlines about rates and additional deductions, but the real impact on estimates comes down to a few key shifts, particularly for many of my clients in California. Those who itemize deductions will likely see an increased deduction due to the increased SALT deduction cap from $10,000 to $40,000 (with income level phaseouts). Additionally, some people will now be able to deduct car-loan interest. For those who do not itemize deductions, they will still have an opportunity to get a deduction for charitable contributions ($1,000-$2,000, depending on filing status). The Child Tax Credit increased slightly, and there were changes to certain business and energy credits, which will decrease the final tax liability for many taxpayers. These changes are in addition to making many of the individual tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) permanent.

Put simply, in 2025, a tax engagement needs to be focused on strategy, not just compliance. 

Safe Harbors Aren’t Automatic Wins 

The IRS does offer protection from penalties through safe harbors. On paper: if your adjusted gross income was $150,000 or less, pay 100% of last year’s liability. Above that? It’s 110%. Or you can aim for 90% of your current-year liability.

Sounds easy, right? But choosing which safe harbor to use is one area where Tax Advisory from a qualified CPA becomes essential. This is especially important in states like California, where certain high-income individuals cannot use the prior year safe harbor protection.

Choosing the Right Approach 

Here’s how I approach it:

If your income is steady year-to-year, prior-year safe harbor often works just fine. It’s the least stressful option, and we can lock it in early.

If your income is climbing, say you got a promotion, closed a deal, or sold stock, I would still lean on the prior-year safe harbor to delay large payments and preserve cash, while modeling out current-year liability in the background so you don’t get hit with a surprise bill.

If your income shifts dramatically mid-year? We can simulate scenarios, model the outcome, and determine the minimumquarterly estimated payments required to stay penalty-free without overpaying. Sometimes in the case of a mid-year windfall, annualizing income may become part of the strategy. 

The Tax Planning Core: Real-Time Adjustments 

There is a big misconception out there that once estimates are set, you’re done for the year. Not true. I will often use prior year safe harbor for the first couple of quarters and then customize the Q3 and Q4 payments as appropriate given how the year is unfolding.

If your income changes, we can update. If new law rolls out, we can adjust. If you hit a windfall or your RSUs vest, we can optimize. A good tax strategy is dynamic and adjusts to changing variables during the year. 

Don’t Let Deadlines Sneak Up 

Even the sharpest plan fails if you miss deadlines. For 2026, those dates are:

• April 15 (Q1)
• June 15 (Q2)
• September 15 (Q3)
• January 15, 2027 (Q4)

I provide the initial plan for estimated payments with the delivery of the tax return, and I encourage clients to set reminders to make sure the payments are made timely.

When DIY Falls Apart 

Quarterly estimates get tricky fast when your finances aren’t straightforward. With stock compensation, one-time income events like real estate sales, dual-income households with uneven withholding, variable business margins, even crypto trades, any of these can put you in a situation where you’re facing underpayment penalties if you don’t adjust. 

A CPA focused on Tax Advisory, like me, isn’t a luxury here. It’s the price of staying sane.

The Bottom Line 

The goal is simple, but the execution is not. We help clients pay the legal minimum, keep the timing lined up with your cash flow, and stay penalty-free.

If you’re tired of winging it every quarter, now’s the time to work with someone who knows exactly how to balance compliance, strategy, and cash flow. Set up some time with me and I’ll tell you how I can help.

About Dark Horse CPAs

Dark Horse CPAs provides an integrated suite of services including tax, accounting, fractional CFO, and wealth management to small businesses and individuals across the U.S. The firm was established to transform the client experience by offering personalized, high-quality services that small businesses and individuals deserve. As Dark Horses in their industries, these businesses benefit from advanced tax strategies and accounting insights typically reserved for larger companies. With a nationwide presence and a team of dedicated professionals, Dark Horse CPAs is committed to your success. Get a quote today.