The federal income tax system is pay-as-you-go. Taxpayers whose income is not covered by withholding, including many self-employed people, business owners, investors, and farmers, generally make estimated payments during the year. Individuals usually pay in four installments, and corporations have their own schedule. Underpaying can result in a penalty, subject to safe harbor rules.
Estimated payments matter for cash planning because they are large, predictable outflows. A thirteen-week cash outlook should show them explicitly, especially in businesses with seasonal income. Farmers and fishers have special estimated-tax rules, so their advisers should confirm the current requirements each year.