How to Pay Quarterly Estimated Taxes
A complete guide to calculating and paying your quarterly estimated tax payments to avoid IRS penalties.
What Are Quarterly Estimated Taxes?
Unlike traditional employees who have taxes automatically withheld from their paychecks, freelancers and self-employed individuals must pay their taxes in installments throughout the year. These are called quarterly estimated tax payments.
Quarterly payments cover both your self-employment tax (Social Security and Medicare) and your federal income tax. Some states also require quarterly estimated state tax payments.
2026 Quarterly Tax Deadlines
April 15, 2026
Income earned: January 1 - March 31
June 15, 2026
Income earned: April 1 - May 31
September 15, 2026
Income earned: June 1 - August 31
January 15, 2027
Income earned: September 1 - December 31
Note: If the deadline falls on a weekend or holiday, the due date moves to the next business day.
Do You Need to Pay Quarterly Taxes?
You must pay quarterly estimated taxes if BOTH conditions apply:
- You expect to owe $1,000 or more in taxes for the year
- Your withholding and credits will be less than 90% of this year's tax (or 100% of last year's tax, whichever is smaller)
If your tax liability will be less than $1,000, you can skip quarterly payments and pay when you file your annual return.
How to Calculate Your Quarterly Payments
Method 1: Current Year Method
Estimate your total annual income and calculate your expected tax liability, then divide by four.
Example:
- Expected annual income: $80,000
- Business expenses: $15,000
- Net profit: $65,000
- Estimated SE tax: $65,000 × 0.9235 × 0.153 = $9,196
- Estimated income tax (22% bracket): ~$6,000
- Total estimated tax: ~$15,196
- Quarterly payment: ~$3,799
Method 2: Prior Year Safe Harbor
The safest way to avoid penalties is to pay 100% of last year's total tax liability divided by four (110% if your prior year AGI exceeded $150,000).
This method protects you from penalties even if your income increases significantly.
How to Make Payments
IRS Direct Pay
Free, immediate payments directly from your bank account. Best for one-time payments.
Recommended for most people
EFTPS
Electronic Federal Tax Payment System. Requires advance enrollment but offers scheduling flexibility.
Best for regular payments
Credit/Debit Card
Pay with a card through a payment processor. Convenience fees apply (up to 2%).
Watch out for fees
Check by Mail
Use Form 1040-ES payment vouchers to mail a check. Include the voucher with your payment.
Slower and riskier
What Happens If You Don't Pay?
If you don't pay enough throughout the year, the IRS will charge you an underpayment penalty. This penalty is essentially interest on the taxes you should have paid.
The penalty rate is currently around 8% annually (varies quarterly), which can add up quickly. That's why it's generally better to overpay slightly than to underpay.
Exception: You won't be penalized if you owe less than $1,000 after withholding, or if you paid at least 90% of this year's tax (100% if AGI under $150,000).
State Quarterly Taxes
Many states also require quarterly estimated tax payments. States with no income tax don't require quarterly payments, but most other states do.
Check your state's tax website for:
- State-specific quarterly payment deadlines
- Payment methods and forms
- Thresholds for required payments
- Penalties for underpayment
Tips for Success
- Set aside money regularly: Aim to save 25-30% of each payment you receive for taxes.
- Use a separate account: Keep your tax savings in a separate savings account to avoid spending it.
- Track income throughout the year: Don't wait until tax time to calculate your liability.
- Adjust as needed: If your income varies, adjust your quarterly payments accordingly.
- When in doubt, overpay: It's better to get a small refund than to face underpayment penalties.
Ready to Calculate Your Quarterly Taxes?
Use our free calculator to estimate your quarterly payment amount.
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