Quarterly Estimated Taxes: The Complete Guide

When you have a regular job, your employer withholds taxes from every paycheck and sends them to the IRS on your behalf. By the time April arrives, most of your tax bill is already paid. You file, maybe get a small refund, move on.

When you work for yourself, none of that happens automatically. The IRS still wants their money throughout the year. They just need you to send it yourself, four times a year. These are quarterly estimated tax payments.

Who has to pay them

You are required to make estimated payments if you expect to owe at least $1,000 in federal taxes for the year AND your withholding and credits will cover less than 90% of this year's tax (or less than 100% of last year's tax).

In practice: if you are self-employed and making meaningful money, you almost certainly need to pay estimated taxes. The threshold is low enough that even a solid side hustle can push you over it.

The 2026 deadlines

Q2's two-month window (April and May only) trips people up every year. You are not behind if you think April, June, September, January does not divide evenly into quarters. You are correct. It does not. The IRS named them wrong.

How much to pay

You have two options for calculating your quarterly payments, and one of them is much easier:

Option 1: Safe harbor (the easy way)

Pay 100% of last year's total tax liability, divided by 4. If your adjusted gross income last year was over $150,000, the threshold is 110% of last year's tax.

Find your number: pull up last year's Form 1040 and look at line 24 (total tax). Divide by 4. Pay that amount each quarter. You cannot be penalized for underpayment as long as you hit this number, even if you end up owing more in April.

This is the method most freelancers with variable income should use. It is predictable, protects you from penalties, and does not require you to estimate this year's income accurately.

Option 2: Estimate this year's actual tax

Calculate what you expect to earn, subtract deductions, apply the tax rates, divide by 4. This is more accurate but requires you to know roughly what you will make this year. If your income varies a lot, safe harbor is usually the better call.

How to actually send the payment

Three options, all easy:

What happens if you miss a payment

An underpayment penalty. Currently around 8% annualized on the amount you should have paid, calculated from the due date until you pay. On a $3,000 quarterly payment missed by three months, the penalty is roughly $60. Not the end of the world, but not nothing.

You report and calculate underpayment penalties using Form 2210 when you file your taxes. Your tax software should handle this automatically.

State estimated taxes

Most states with income tax also require quarterly estimated payments, on their own schedule and through their own system. California uses FTB.ca.gov. New York uses the state tax portal. Check your state's revenue department for the specifics.

State payments are separate from federal payments. Missing one does not affect the other. Both have their own penalty systems.

The practical system

Put the four deadlines in your calendar right now. Set a reminder two weeks before each one. Keep your tax savings in a separate account (the 25-35% you are setting aside from each payment). When the deadline approaches, run the calculator, confirm the number, pay via IRS Direct Pay. Takes about 10 minutes.