There is indeed a difference between increasing withholding and paying estimated taxes. By default, withholding is treated as having been received in equal parts throughout the year, which means that withholding late in the year can make up for underpayment earlier in the year. By contrast, estimated tax payments only apply when they are actually made and cannot make up for underpayment earlier in the year. Except for the inconvenience of making the change and later changing it back, increasing withholding during the year is almost always better than just paying estimated taxes.
