If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. With the passage of the One Big Beautiful Bill Act (OBBBA), forecasting your tax obligation is now more critical than ever. You have two quarterly estimated tax payments due dates available to you after the passage of the bill in July. One payment is due by September 15th, and another is due in January 2026. Please take a moment to review and adjust your third-quarter estimated taxes.

Third-quarter estimated taxes due Monday, September 15, 2025

You are required to withhold at least 90% of your 2025 tax obligation or 100% of your 2024 obligation. If your income is more than $150,000 ($75,000 if married filing separately), you must pay 110% of your 2024 tax obligation to be safe from an underpayment penalty. A quick look at last year’s tax return and a projection of this year’s obligation can help determine if a payment is necessary. Here are some other things to consider:

• Underpayment penalty. If you do not have proper tax withholdings during the year, you could be subject to an underpayment penalty. The penalty can occur if you do not have proper withholdings throughout the year. A quick payment at the end of the year may not help avoid an underpayment penalty.
• W-2 withholdings have special treatment. A W-2 withholding payment can be made at any time during the year and be treated as if it were made throughout the year. If you do not have enough funds to pay the estimated quarterly payment now, you may be able to adjust your W-2 withholdings to make up the difference.
• Self-employed workers. Remember to pay your Social Security and Medicare taxes in addition to your income taxes. Creating and funding a savings account for this purpose can help avoid the cash flow hit each quarter when you pay your estimated taxes.
• Don’t forget state obligations. You are also normally required to make estimated state tax payments if you’re required to do so for your federal taxes. Consider conducting a review of your state obligations to ensure you meet these quarterly estimated tax payments as well.

Don’t forget to take OBBBA tax law changes into account

Here are key law changes to consider as you forecast your estimated tax liability:

• • Tax-free tips
  • Tax-free overtime
  • The new $6,000 senior deduction
  • Higher standard deduction
  • Child tax credit increase to $2,200 per child
  • Rise in tax deductions from $10,000 to $40,000 (a.k.a. SALT limitation)
  • New bonus depreciation rules and section 179 business capital expensing options

So, spend some time now calculating your estimated tax liability. And remember that to avoid any underpayment penalties, use last year’s tax as a baseline. Contact our RRBB advisors if you have any questions or are ready for the next step.