Making Quarterly Payments while Owing for Previous Year

[jess100]

Seeking advice on what to prioritize with the IRS:

I paid quarterly taxes for 2024, but ended up owing because I made a lot more than I did the previous year. I'm unable to pay it all at once, so I set up a payment plan and it was approved.

With tax day approaching: my question is, am I supposed to prioritize paying back what I owe for 2024 BEFORE I make quarterly payments for 2025 or do I make quarterly payments for 2025 while continuing to make payments for 2024 at the same time?

Not sure if the quarterly payments would just automatically go to my IRS balance?

[fanfare]

IRS requires you to estimate your Required Annual Payment for the year 2025 and pay as you go.

So you have to do both.

Priority is keeping current on your installment payments for 2024.

missing or insufficient  Estimated tax could result in an underpayment penalty on your 2025 tax return. That's manageable.

@jess100 

Your Estimated Tax payment goes onto your 2025 account

[LindaS5247]

Your 2025 quarterly payments will go towards your 2025 tax return. When you are on an instalment plan with the IRS the interest keeps accruing, so paying that off is a big plus.

An instalment plan allows you to pay your taxes over time and avoids garnishments, levies or other collection actions. However, you'll still owe penalties and interest for paying your taxes late.