How do I estimate my tax liability?
To file an extension, you'll need a reasonable estimate of your total federal tax for 2025.
Start with last year (quickest method)
If your income is similar to last year:
Use your 2024 total tax (Form 1040, Line 24) as your estimate
Adjust for any changes
If your income changed, update your estimate:
Add income from 1099 or self-employment
Plan for about 20–30% of untaxed income to go toward federal taxes
Factor in major changes (new employment, raise, investment income)
Use IRS safe harbor to avoid penalties
Filing an extension is permitted by the IRS and gives you until October 15th to file your return. We use the safe harbor method to calculate your extension payment and help you avoid IRS penalties or late fees.
You're generally protected if you pay at least:
100% of your 2024 total tax, or
110% of your 2024 total tax if your income was over $150,000
Subtract what you've already paid
From your estimate, subtract:
Federal tax withheld (W-2s, 1099s)
Any estimated payments you've already made
This helps you understand if you may owe a balance.
How can I get a more accurate estimate?
For a more precise view of what you may owe:
Complete as much of your return as possible in april
You don't need to submit -- just work through the flow
We'll calculate your estimated taxes based on your actual inputs. You can then take that amount and enter it in the "Estimated total federal tax for 2025" field.
Keep it simple
We use the safe harbor method to help you avoid IRS penalties or late fees. Your final tax liability will be calculated when you file, so you may owe more or get a refund.
This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.
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