From the desk of STAC Bizness Solutions CEO, Shawna Aho

NOTE: Before reading this post, I recommend you take just a minute to review my previous post on this topic from March 2025.  It discusses a few foundational points including what estimated taxes are, and if you are required to pay them.  You can link to that post here.

In this post, I’m going to dive a little deeper into estimated taxes, helping you determine:

• How much you should be paying
• When you should be making payments, and
• How to actually facilitate the payments to the IRS

How Do You Figure Out How Much You Should Be Paying?

One of the most challenging aspects of estimated taxes for dental practice owners is calculating how much you should actually be paying. Since your income isn’t the same every month and may fluctuate due to seasonality, equipment purchases, staff changes, or other investments, it can feel like a moving target. But there are practical ways to estimate what you’ll owe and adjust along the way.

The starting point is estimating your practice’s total net income for the year. This means projecting your total revenue and subtracting all ordinary and necessary business expenses, including salaries, rent, supplies, equipment depreciation, insurance, marketing costs, and other overhead expenses. If you work with a professional bookkeeper, you should have a good sense of these figures. Once you have an estimate of your profit, you’ll also need to include any additional sources of income you might have outside the practice—such as dividends, investment income, or real estate revenue—since the IRS looks at total income when calculating taxes due.

From this figure, you’ll subtract deductions such as contributions to retirement accounts (like SEP-IRA or Solo 401(k)), health insurance premiums if self-employed, and any applicable business deductions or credits. What remains is your estimated taxable income.

Based on this taxable income, you can apply the appropriate tax rates. Federal income tax rates are progressive, meaning that as your income increases, the rate at which you are taxed increases for each bracket of income. Then, if you’re self-employed, you’ll calculate self-employment tax on your net earnings. Remember, self-employment tax includes the employer and employee portions of Social Security and Medicare—amounting to 15.3% up to the Social Security wage base (which is $176,100 in 2025), and Medicare tax with no cap (plus an additional 0.9% for higher earners).

If that sounds complicated, you’re not alone. Many dental practice owners work with partner like STAC to help them forecast these numbers at the beginning of the year and update them quarterly as real numbers become available.

When and How Do You Pay Estimated Taxes?

Once you know how much you should be paying, you’ll need to actually make the payments. The IRS sets four due dates for estimated tax payments each year: April 15, June 15, September 15, and January 15 of the following year (NOTE: if the 15^th falls on a weekend or holiday, the deadline is moved to the following business day). These payments divide your total estimated tax liability into four portions. If you expect that your income will be consistent throughout the year, you can divide the total evenly. But if you anticipate fluctuations—such as earning more in certain months—you may opt to make uneven payments based on actual earnings.

Payments can be made online through IRS Direct Pay, which allows you to pay directly from a bank account, or through the Electronic Federal Tax Payment System (EFTPS), which is particularly useful if you prefer to set up and manage recurring payments. Some still prefer to pay by check, using IRS Form 1040-ES, but in today’s digital world, online payments are generally more secure and convenient.

What If You Don’t Pay Enough?

Failing to pay enough estimated tax can result in underpayment penalties and interest. The IRS expects that you’ll either pay at least 90% of your current year’s tax liability or 100% of last year’s liability (110% for high-income earners) through estimated payments or withholding. If you fall short of these thresholds, even if you pay your total tax bill by April 15, you can be hit with penalties that grow the longer the underpayment persists. These penalties are essentially interest charges on the taxes you should have paid earlier.

For example, if your estimated annual tax bill is $60,000 but you only pay $20,000 throughout the year, you may face penalties on the $40,000 you should have paid earlier, plus interest on that amount. These penalties can often amount to thousands of dollars, making it crucial to keep up with estimated payments.

Final Thoughts: Being Proactive With Estimated Taxes is ALWAYS The Best Gameplan

Treating estimated taxes as part of the routine financial health of your practice can prevent stress and help you stay in control. By planning ahead, working with a knowledgeable advisor like STAC Bizness Solutions, and regularly setting aside funds, you can handle estimated taxes with confidence and focus on what you do best—running a successful dental practice and caring for your patients.

Should you be paying estimated taxes… and if so, how much?  Contact us online or call us at 844-424-9637 for a free initial consultation.