Today I learned that quarterly tax payments for the third quarter are due in September

Thank you so much for the clear explanation! So I still have a few days to figure this out before September 15th. That's a relief. One question - when you say I need to cover either 90% of my liability or 100% of last year's tax... how do I know which one to pick? I made about $24,000 more this year because of the stock sale than I did last year.

You should choose whichever method results in the lower payment requirement. Since you made significantly more this year, using 100% of last year's tax will likely be the easier and lower option. This is a perfectly legitimate strategy many taxpayers use when their income increases. The 90% current year calculation would require you to project your total income, deductions, and credits for the entire year, which can be complicated if you don't know exactly what your situation will look like by December 31st. Using last year's tax as your safe harbor is simpler and protects you from underpayment penalties.

How accurate is it really? I've used TurboTax before but they always seem to miss things when it comes to investment income. Does it connect directly to your brokerage accounts?

I'm a bit skeptical about these tax tools. Does it actually save you money compared to just paying the full amount you think you'll owe? And how does it handle state estimated payments, which are sometimes on different schedules than federal?

It's been extremely accurate for me - much better than what I experienced with TurboTax for investment income. You can either connect accounts directly or upload statements, and it reads through everything to identify taxable events you might miss. The real value comes in not overpaying throughout the year. It calculates the minimum required payment to avoid penalties while keeping more money in your pocket until filing time. And yes, it handles state payments too - it keeps track of the different due dates and requirements for each state, which saved me a lot of headaches since my state has different payment thresholds than federal.

Wait, how does that even work? I thought the IRS phone lines were just permanently busy and there's no way around it. Are you saying this service somehow jumps the queue?

That sounds like a scam. Why would I pay someone else to call the IRS for me? And how do I know they're not recording my tax information or something sketchy?

It doesn't jump the queue - they basically have an automated system that waits on hold for you. Think of it like having someone else sit on hold while you go about your day. When they finally get through to a real person, they connect you to the call. They don't ask for or have access to your tax information. They're literally just handling the waiting part of the call for you. When the IRS agent comes on the line, you're the one who speaks with them directly. It's basically a time-saving service, not a tax advice service. I was skeptical too until I realized I was wasting half a day on hold while trying to work.

Thanks for the tip! I do use H&R Block usually, but I never thought about using it mid-year. Do I need to buy the current tax year version now or can I use last year's until the new version comes out?

You'll need the current year version, but you don't have to pay for it yet. H&R Block and most other tax software companies let you create an account and start entering information for free. You only pay when you actually file. So you can use their calculators and worksheets now to estimate your quarterly payments without paying for the full software. Just make sure you're using the 2025 version (for taxes you'll file in 2026), not the 2024 version that was for filing this past April.

Yes, there is a threshold. Generally, you need to make quarterly estimated tax payments if you expect to owe at least $1,000 in tax for the year after subtracting withholdings and credits, AND your withholding and credits will cover less than 90% of your current year tax or 100% of your prior year tax. For $2,200 in crypto gains, it depends on your overall tax situation. If you have a regular job with withholding that covers most of your tax liability, you might not need to make estimated payments for this relatively small amount.