Quarterly Estimated Taxes for DePIN Miners: Complete 2025 Guide
As a DePIN miner, you're self-employed in the eyes of the IRS. That means no employer is withholding taxes from your mining income—you need to pay estimated taxes quarterly or face penalties. Here's exactly how to calculate and pay.
Q1
January 1 - March 31
April 15, 2025
Q2
April 1 - May 31
June 15, 2025
Q3
June 1 - August 31
September 15, 2025
Q4
September 1 - December 31
January 15, 2026
Do You Need to Pay Quarterly Estimated Taxes?
The IRS requires quarterly estimated tax payments if you expect to owe $1,000 or morein taxes for the year after subtracting withholding and refundable credits.
Quick Test: Do You Owe Estimated Taxes?
DePIN mining income over $3,000/year? Yes, you likely need to pay.
No W-2 job withholding to cover it? Yes, you need to pay.
Owed more than $1,000 on last year's return? Yes, you need to pay.
Understanding Your Tax Rate
DePIN mining income is subject to two types of tax:
15.3%
Social Security (12.4%) + Medicare (2.9%)
Applied to 92.35% of net self-employment income. This tax applies regardless of your income tax bracket.
10-37%
Based on your total taxable income
Added to your other income (W-2, investments, etc.). Most DePIN miners fall in the 22% or 24% bracket.
Combined Effective Tax Rate Examples
| Tax Bracket | Income Tax | SE Tax | Combined Rate |
|---|---|---|---|
| 10% bracket | 10% | ~14.1% | ~24.1% |
| 12% bracket | 12% | ~14.1% | ~26.1% |
| 22% bracket | 22% | ~14.1% | ~36.1% |
| 24% bracket | 24% | ~14.1% | ~38.1% |
| 32% bracket | 32% | ~14.1% | ~46.1% |
* SE tax is calculated on 92.35% of net income, hence ~14.1% instead of 15.3%
How to Calculate Your Quarterly Payment
Let's walk through a real example:
Step 1: Calculate Annual Mining Income
Step 2: Subtract Deductions
Step 3: Calculate Self-Employment Tax
Step 4: Calculate Income Tax
Step 5: Calculate Quarterly Payment
Safe Harbor Rules: Avoid Penalties
The IRS won't charge underpayment penalties if you meet one of these "Safe Harbor" thresholds:
100%
of Last Year's Tax
Pay at least 100% of your prior year's tax liability through estimated payments + withholding. (110% if AGI over $150,000)
90%
of Current Year's Tax
Pay at least 90% of your current year's tax liability. This requires accurate income estimation throughout the year.
Pro Tip: Use Last Year's Tax
If your DePIN income is unpredictable (token prices fluctuate), base payments on 100% of last year's tax liability. This guarantees no underpayment penalty, even if you earn significantly more this year.
How to Pay Quarterly Estimated Taxes
IRS Direct Pay (Recommended)
Free bank account transfer at irs.gov/directpay. Select "Estimated Tax" as payment type. Instant confirmation, no registration required.
EFTPS (Electronic Federal Tax Payment System)
Free but requires enrollment at eftps.gov. Allows scheduling recurring payments in advance. Best for automated quarterly payments.
Credit/Debit Card
Pay through authorized processors (1.85-2% fee for credit, flat fee for debit). Visit irs.gov/payments for processor list.
Mail with Form 1040-ES Voucher
Download Form 1040-ES from irs.gov, fill out payment voucher, mail with check. Slowest method—allow 2+ weeks for processing.
Penalty for Underpayment
If you don't pay enough estimated tax, the IRS charges a penalty calculated at the federal short-term interest rate plus 3 percentage points.
2025 Underpayment Penalty Rate
~8% annually
The penalty is calculated from the quarterly due date until the underpayment is satisfied. For example, a $1,000 Q1 underpayment from April 15 to April 15 of the following year would incur ~$80 in penalties.
State Estimated Taxes
Don't forget: most states also require quarterly estimated tax payments if you have self-employment income. Common rates:
California
9.3%+
New York
8.82%+
Texas
0%
Florida
0%
Illinois
4.95%
Pennsylvania
3.07%
Ohio
0-4%
North Carolina
5.25%
Step-by-Step Process
Calculate Your Annual Mining Income
Add up all mining rewards received. Use the fair market value at the time of receipt. Include all networks: Helium, Hivemapper, DIMO, Render, etc.
Subtract Business Deductions
Deduct equipment costs (Section 179), internet, electricity, and other business expenses. This gives you net self-employment income.
Calculate Self-Employment Tax
Multiply net income by 92.35% (adjustment factor), then by 15.3% (Social Security 12.4% + Medicare 2.9%). This is your SE tax.
Calculate Income Tax
Add mining income to your other income, apply your tax bracket (10%-37%). Don't forget the SE tax deduction (half of SE tax reduces taxable income).
Divide by 4 for Quarterly Payments
Take your total estimated tax (income tax + SE tax), divide by 4. This is your quarterly payment amount.
Pay by Quarterly Deadlines
Submit payments by April 15, June 15, September 15, and January 15 (of following year). Use IRS Direct Pay, EFTPS, or mail with Form 1040-ES voucher.
Frequently Asked Questions
If you expect to owe $1,000 or more in taxes for the year (after withholding and credits), you're generally required to pay quarterly estimated taxes. Most active DePIN miners earning $3,000+ annually will meet this threshold due to self-employment tax obligations.
The IRS charges an underpayment penalty, calculated using the federal short-term interest rate plus 3%. As of 2025, this is approximately 8% annually. The penalty is calculated on each quarter's underpayment from the due date until paid.
Estimate your annual mining income, subtract deductions (equipment, expenses), then apply the combined tax rate (your income tax bracket + 15.3% self-employment tax). Divide by 4 for quarterly payments. Use the Safe Harbor rule: pay 100% of last year's tax to avoid penalties.
Yes, you can adjust quarterly payments as your income fluctuates. If token prices drop or rewards decrease, reduce future payments accordingly. If income increases, raise payments to avoid underpayment penalties. There's no penalty for overpaying (you get a refund).
Use Form 1040-ES (Estimated Tax for Individuals). You can pay online via IRS Direct Pay, the EFTPS system, or by mailing a check with a Form 1040-ES payment voucher. Most people prefer IRS Direct Pay for convenience.
Never Miss a Quarterly Payment
DePIN Tax tracks your mining income in real-time and estimates your quarterly tax obligations. Get reminders before each deadline and calculate accurate payments based on actual rewards.