Do I use 1040-ES to pay tax on my 2025 IRA withdrawal? Is my deadline to pay on Jan 15, 2026?

[Bsch4477 · Accepted solution]

Correct on both. 

[VolvoGirl]

Didn’t they take any tax withholding out of the IRA withdrawal?   The 1040ES is to make an Estimated payment, it’s not the actual tax.   

You still have to enter the whole gross amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding and estimated payments are subtracted from the total tax to figure your refund or tax due. The Gross amount shows up on 1040 line 4a or 5a and the taxable amount on 4b/5b.  You will get credit for the withholding on 1040 line 25b.

[fanfare]

Your deadline to pay is April 15, 2026.

If you are concerned about underwithholding penalties and did not already calculate your Required Annual Payment, pay as much tax as you can as soon as you can.

@rylescupidez 

[baldietax]

For the January deadline, figure out your "safe harbor" calculation for 2025 i.e. during the year you need to have paid thru withholding or timely (usually quarterly) estimated taxes (ES), the smaller of: 100% of your 2024 tax (110% if AGI > 150k or 75k if filing MFS), or 90% of your 2025 tax.

The deadline for Q4 ES payment to meet the safe harbor is due 1/15/26, and then you owe the balance of your tax by 4/15/26.

However even if you pay by January to cover your safe harbor, you may still have a penalty by default if you didn't pay ES throughout the year; by default IRS assumes all your income is earned evenly by quarter and the ES payments need to line up with those.  You can file Form 2210 Annualized Income method to show how the timing of the income and ES by quarter line up, and hopefully if the withdrawal and ES payments were both in Q4 you may be able to reduce or eliminate the penalty.

When you prepare your filing, keep eye on line 38 on Form 1040 for the penalty calculated by default, and under Other Tax Situations / Underpayment Penalty you can work thru the AI method to try and reduce it.

See Form 2210 for more info, and Lines 1-9 for the safe harbor calculation.

[rylescupidez]

I made a lump sum withdrawal in July on an IRA as down payment towards an investment property and I chose not to have any taxes withheld. Because I do not want any underpayment on my 2025 taxes, I would like to send to the IRS the taxes I would have withheld on the lump sum withdrawal (22%) and I believe I can send my payment with the 1040-ES which I plan to send by 1/2/2026. 

[Bsch4477]

Ideally you would have made a payment in September. But carry through with your plan.