Hey friends, sorry for any confusion, but this is the backstory:
I got pretty lucky with my investments and made approximately ~$750k total gains last year as I sold some long held stock investments and some speculative Call Options and reconsolidated into more conservative investments (50% S&P 500, 20% Bonds, 20% Gold, 5-10% speculative investments).
I did not know that I could pay the upcoming tax year (FY25) in advance so I ended up owing ~$300k in taxes in State and Federal. This was paid in full since I had set it aside planning for Tax Day – but the issue is coming from this years 1040-ES payments.
Since the amounts were so large, I went with a licensed CPA to handle it, and they set-up a 1040-ES payment plan for this year of quarterly payments of ~$65k. I explained to them that several things lined up that allowed for this amount and that I don't anticipate returns like this in the near future and for my current portfolio allocation I might have about $5k in dividend income (and this amount is close enough that my W2 job tax allocation may cover or I can tax loss harvest the speculative investments). My CPA said that this plan sounds good, and that the 1040-ES payments are optional and that I don't have to pay them but that if things change in the future to do it to avoid penalties in the later quarters – which I plan to do going forward (I had no clue you could pay in advance til a month ago oops).
The issue, is that one of these 1040ES payments were placed on the Tax Day 04/15/2026 deadline – after I was told not to pay it. The funds were not there since I was told not to pay, and today I received a letter in the mail for the payment voucher and I'm still not sure if this is still optional or not as I have been calling the IRS call center every other day since Tax Day but cannot get an single representative to pick up.
Does anyone have any recommendations on what I should do?
Thanks!
**FWIW: There does not appear to be a balance on my account yet, but also my taxes are still being processed for this current year
1040ES Payments on Outlier 2025 AGI
byu/BullCallBrawler intax
Posted by BullCallBrawler
2 Comments
If you didn’t pay , you didn’t pay. The letter means nothing. Just make sure your accountant does not factor it in
Estimated payments are generally optional in the sense that you choose whether to prepay, but penalties can apply if you end up underpaying enough tax during the year. Since your 2026 income sounds dramatically lower, you likely should ask your CPA about using the safe harbor rules or annualized income method so you’re not sending $65k quarterly based on a one-time 2025 windfall.