Quarterly Estimated Taxes Explained

If you’re a freelancer, self-employed, or run a small business, staying on top of taxes is part of the job. When your income isn’t subject to withholding, the IRS expects you to pay estimated quarterly taxes during the year. This guide covers what those payments are, who must pay them, 2026 deadlines, and how to pay so you stay compliant and avoid penalties. We’ll walk through calculation basics, safe-harbor rules, and practical payment options so you can plan ahead with confidence.

What Are Estimated Quarterly Taxes?

Estimated quarterly taxes are payments you send to the IRS during the year instead of having tax withheld from a paycheck. Freelancers, contractors, sole proprietors, and many business owners estimate their annual tax and pay it in four installments. That way you pay as you earn instead of one big bill at filing time.

These payments can include income tax, self-employment tax (Social Security and Medicare), and Alternative Minimum Tax (AMT) when it applies. Keeping up with quarterly payments helps you avoid underpayment penalties and interest.

Who Needs to Pay Estimated Quarterly Taxes?

You generally must pay estimated tax if you expect to owe $1,000 or more for the year after subtracting withholding and refundable credits. That often includes freelancers, independent contractors, sole proprietors, partners, and S corporation shareholders. If you owed tax last year, the IRS may still expect estimated payments this year even if you expect lower income. Corporations typically must pay estimated tax if they expect to owe $500 or more.

Why Estimated Quarterly Taxes Matter

Skipping or underpaying estimated tax can lead to penalties and interest on the shortfall. Payments aren’t only for income tax—they also cover self-employment tax and AMT, so staying on schedule avoids penalties on those too. Hitting the quarterly deadlines helps you budget during the year and avoid a large lump sum at filing time, which supports steadier cash flow and fewer surprises. Planning quarterly amounts in advance also makes it easier to track what you’ve paid and adjust if your income changes mid-year.

How to Calculate Your Estimated Quarterly Tax Payments

A simple approach is to use last year’s tax as a baseline: divide it into four equal payments. Paying 100% of last year’s tax usually protects you from underpayment penalties. If your AGI is over $150,000 (or $75,000 married filing separately), you generally need to pay 110% of last year’s tax. If your income will differ a lot from last year, estimate using the steps below.

Calculate Your Estimated Income

Estimate your adjusted gross income (AGI) for the year and factor in changes—extra revenue, shifts in business expenses, or seasonal patterns.

Determine Deductions and Credits

Account for business expenses, self-employment deductions, and any credits that apply. Subtracting these from estimated income gives you a better picture of taxable income.

Use IRS Form 1040-ES

The IRS Form 1040-ES has a worksheet to estimate your quarterly payments and includes vouchers for each period.

Set Aside Funds Regularly

Many people set aside 30–35% of income for taxes in a separate account so the money is there when each quarter’s payment is due.

Make Adjustments as Needed

If your income changes after Q1, run the Form 1040-ES worksheet again and adjust later payments to avoid penalties or excess overpayment.

Key Deadlines for Estimated Quarterly Tax Payments

Quarterly due dates are April 15, June 15, September 15, and January 15 of the next year. If the date falls on a weekend or holiday, the due date is the next business day. You may also pay the full year’s estimated tax in one payment by the last due date. Mark the dates and set reminders so you don’t miss a deadline.

How to Pay Your Estimated Quarterly Taxes

You can pay in several ways:

• Mail: Send your completed Form 1040-ES and payment. The mailing address depends on your state and residency—check the IRS website or the form instructions.
• Online: Use your IRS Online Account, Direct Pay, or the Electronic Federal Tax Payment System (EFTPS).
• Phone: You can pay by phone through the IRS; wait times can be long.
• IRS2Go app: The IRS2Go app lets you pay via Direct Pay or an approved processor from your phone.