When you work for an employer, taxes are withheld from every paycheck automatically. When you are self-employed, no one withholds anything. That means you are responsible for paying taxes throughout the year on your own - and if you do not, the IRS will charge you a penalty when you file your annual return.
The mechanism for doing this is estimated quarterly tax payments. Here is a plain-English explanation of how they work.
Who Needs to Pay Estimated Quarterly Taxes?
Generally, you need to make estimated tax payments if you expect to owe at least 1,000 dollars in federal taxes for the year after subtracting any withholding and credits. For most self-employed people with meaningful business income, this threshold is reached fairly quickly.
This applies to sole proprietors, freelancers, independent contractors, partners in a business, and self-employed individuals of any age - including those who are also receiving Social Security or pension income.
If you also have a part-time W-2 job, your withholding from that job may cover some or all of what you owe. It depends on your total income and tax situation.
What Taxes Are You Paying With These Payments?
Estimated payments cover both your income tax and your self-employment tax (Social Security and Medicare). You do not pay them separately - you estimate your total expected tax liability for the year and pay a portion of that each quarter.
How Do You Estimate What You Owe?
The IRS provides Form 1040-ES specifically for this purpose. It walks you through estimating your expected income, deductions, and credits for the year, then calculating the tax owed.
A common and straightforward approach is the safe harbor method: pay at least 100 percent of what you owed in taxes last year (or 110 percent if your prior year income was above 150,000 dollars). If you do that, the IRS will not charge you an underpayment penalty even if you end up owing more when you file - you simply pay the difference at tax time.
If your income is variable or hard to predict, many self-employed people simply set aside 25 to 30 percent of each payment they receive throughout the year and use that to fund their quarterly payments.
What Are the Four Quarterly Deadlines?
For 2026, the estimated tax payment due dates are:
| Payment Period | Due Date |
|---|---|
| January 1 - March 31 | April 15, 2026 |
| April 1 - May 31 | June 15, 2026 |
| June 1 - August 31 | September 15, 2026 |
| September 1 - December 31 | January 15, 2027 |
Note that these are not evenly spaced. The second quarter covers only two months, which catches some people off guard in their first year.
If a due date falls on a weekend or federal holiday, the deadline moves to the next business day.
How Do You Actually Make the Payments?
The easiest method is IRS Direct Pay at irs.gov/payments, which allows you to pay directly from a bank account at no cost. You can also pay by credit or debit card (a processing fee applies) or mail a check with a Form 1040-ES voucher.
The IRS also offers EFTPS (Electronic Federal Tax Payment System) at eftps.gov, which allows you to schedule payments in advance.
What Happens If You Miss a Payment?
If you underpay or miss a quarterly payment, the IRS charges an underpayment penalty calculated on the amount and how late it was. The penalty is generally modest, but it adds up. Staying on schedule is easier than catching up at the end of the year.
Where to Learn More
- IRS - Estimated Taxes - irs.gov/businesses/small-businesses-self-employed/estimated-taxes The IRS overview of who must pay, how to calculate, and how to pay estimated taxes.
- IRS - Form 1040-ES - irs.gov/forms-pubs/about-form-1040-es The form used to calculate and submit estimated quarterly tax payments, with instructions.
- IRS Direct Pay - irs.gov/payments/direct-pay Pay your estimated taxes directly from a bank account, free of charge.
Disclaimer: This article provides general information for educational purposes only and does not constitute tax or financial advice. Payment deadlines and thresholds may change - confirm current dates and requirements at irs.gov or consult a CPA before making decisions.