@FrustratedUser yes you need to meet the 'safe harbor' amount of tax paid during the year in a "timely" manner - withholding is always considered "timely" even if it occurs later in the year, whereas estimated taxes need to paid on a quarterly basis by default. (there is another option to use the 'annualized income' method on Form 2210 if you have uneven income e.g. Roth conversion or large cap gain in Q4 and need to make a one-off ES payment, but if your income is evenly earned thru the year this method won't help eliminate the penalty).
the IRS by default assumes your income and withholding happen evenly thru the year, these annual totals are divided into 4, whereas estimated tax have specific dates that need to line up with that by quarter. you are correct the penalty calculation is done on a quarterly basis, you need to meet 25% of your safe harbor amount by Q1 etc. Overpayment in a quarter later in the year cannot make up for an underpayment earlier in the year, but will stop the penalty interest accruing once you make up the underpayment balance as soon as possible. Overpayment earlier in the year will apply to underpayment in later quarters. So if you miss Q1 ES for example, you should pay 50% of the total ES in Q2 to stop the penalty from accruing and would pay a penalty on the Q1 ES for a few months not the whole year.
in terms of how much to pay - @Cindy4 outlined the safe harbor amount you need to meet. TT by default will generate ES vouchers based on 100% of your 2024 tax (110% if AGI > 150k) and assumes your 2025 withholding will be the same as 2024. In Other Tax Situations/Form W4 and Estimated Taxes you can provide estimates for 2025 to see if 90% of 2025 tax option is more advantageous. The benefit of paying ES based on 2024 tax is that is known/fixed by April 15th so it doesn't matter what your 2025 income/tax is in this calculation - but beware if your 2025 withholding doesn't meet the 2024 number then the ES will not be enough so keep eye on the withholding amount being assumed. The downside of using 2024 is it can result in overpayment if your income/tax is flat or lower in 2025. The downside of using 90% of 2025 is you need to estimate this and keep eye that your ES is making the 2025 amount.
Agree if you use withholding in 2025 you only have 6 months or so left to close the gap. You could still increase withholding now to reduce the amount of ES needed and still pay some smaller ES if you still need to make up the difference. If you didn't pay Q1 ES you will likely have a penalty for that and to minimize that you should pay 50% of the total ES you need to meet in Q2 to stop the penalty. Reducing the ES by increasing withholding will also reduce the penalty, as it will reduce the final determination of how much ES you needed to pay in Q1.
Best place to start is to double-check the ES calculations by figuring out your 'safe harbor' amount that you need to hit in total, subtract projected 2025 withholding from that and divide the result by 4.
More info estimated tax - https://www.irs.gov/faqs/estimated-tax
Links to Form 2210 - https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty
Not a CPA just my 2 cents, hope this helps.
