Quarterly estimated taxes are due April 15, June 15, September 15, and January 15. Self-employed business owners owe them when they expect to owe $1,000 or more in federal taxes for the year. The safe harbor rule: pay at least 100% of last year's total tax liability (110% if your prior-year income was over $150,000) and you avoid underpayment penalties regardless of what you owe.
Quarterly Tax Estimator
How much should you set aside for quarterly taxes? If you are self-employed, the IRS expects you to pay taxes as you earn, four times a year. Most small business owners should set aside 25-30% of their net income for federal and state taxes combined. Underpaying by more than $1,000 for the year triggers an IRS penalty.
Quarterly estimated taxes include both income tax and self-employment tax (15.3% on the first $176,100 of net earnings for 2026). The four due dates are April 15, June 15, September 15, and January 15 of the following year. The easiest way to avoid penalties is the safe harbor rule: pay at least 100% of last year's total tax liability (110% if your AGI exceeded $150,000).
What this means for your business
Most small business owners pay an effective tax rate of 20-30%. Open a separate savings account and transfer 25-30% of every payment you receive into it. This is your tax fund. The IRS underpayment penalty rate has been running 7-8% in recent years, so missing quarterly payments is an expensive mistake.
Quarterly Tax Estimator
Calculate your quarterly tax payments to avoid underpayment penalties.
State tax rates are approximations using top marginal rates. Consult your CPA for exact calculations.
Disclaimer
This is an estimate for planning purposes. Consult a qualified tax professional for exact amounts.
For informational purposes only. Consult a CPA or tax professional for advice specific to your situation.
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Quarterly Estimated Taxes: The Complete Guide for Self-Employed
If you work for yourself, taxes don't get taken out of your paycheck automatically. That's your job now. The IRS expects you to pay as you earn, four times a year. Miss those payments (or underpay) and you'll owe a penalty on top of what you already owe.
Quarterly estimated taxes aren't optional. But they don't have to be stressful either, once you understand the rules.
Who Needs to Pay Quarterly Estimated Taxes
You probably need to pay estimated taxes if you expect to owe $1,000 or more in federal tax for the year after subtracting withholding and credits. This applies to:
- Freelancers and independent contractors
- Small business owners (sole proprietors, LLC members, S-Corp shareholders)
- Side hustlers earning meaningful income outside a W-2 job
- Landlords, investors, and anyone with significant non-wage income
If you have a W-2 job that withholds enough to cover your total tax liability, including self-employment income, you may not need to make separate quarterly payments. But if your side income is growing, don't assume your W-2 withholding covers it.
The Four Deadlines
Quarterly taxes follow a schedule that doesn't perfectly match calendar quarters:
- Q1: April 15 covers January through March
- Q2: June 15 covers April through May (yes, only two months)
- Q3: September 15 covers June through August
- Q4: January 15 of the following year covers September through December
If a deadline falls on a weekend or holiday, it shifts to the next business day. Mark these dates now. Set reminders a week before each one.
The Safe Harbor Rule
Here's the most useful thing in this entire guide. The IRS gives you two ways to avoid underpayment penalties, regardless of how much you actually owe:
- Pay 100% of last year's tax liability across your four quarterly payments (110% if your adjusted gross income was over $150,000)
- Pay 90% of this year's tax liability across your four quarterly payments
Option one is the easiest. Find your total tax (line 24 on recent 1040 forms), divide by four, and pay that amount each quarter. Even if your income jumps significantly and you owe more at tax time, you won't face a penalty. You'll still owe the difference in April, but the penalty is waived.
This is called the "safe harbor" rule and it's the simplest way to stay out of trouble with estimated taxes.
What Happens If You Underpay
The IRS charges an underpayment penalty that works like interest on the amount you should have paid. The rate changes quarterly and has been running around 7-8% in recent years (as of 2025). It's not catastrophic, but it's money thrown away for no reason.
More practically, a big tax bill in April with penalties on top can seriously strain your cash flow. Quarterly estimated tax payments spread the pain evenly so you're never blindsided.
A Quick Example
A freelance graphic designer earned $95,000 last year and owed $22,000 in total federal tax (income tax plus self-employment tax). This year, she divides that by four: $5,500 per quarter. She sends $5,500 on each deadline. Even if she earns $120,000 this year and owes more, she's met the safe harbor threshold and won't face a penalty. She'll settle the difference when she files her return.
Tips to Avoid Surprises
- Open a separate savings account and transfer 25-30% of every payment you receive into it. This is your tax fund. Don't touch it for anything else.
- Use the quarterly tax calculator above to estimate your payments based on your current income and deductions.
- If your income changes significantly mid-year, recalculate. You don't have to pay equal amounts each quarter.
- Work with a tax professional. Estimated taxes interact with deductions, credits, state taxes, and your specific business structure. A good accountant saves you more than they cost. Consult yours before making major decisions based on general guidance.
Estimate your quarterly tax payments with the calculator above. Enter your expected income and deductions, and get the numbers you need before the next deadline hits.
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