What Are Quarterly Taxes?
If you’re self-employed or run a business, the IRS expects you to pay taxes as you earn, not just once a year in April. These advance payments are called estimated quarterly taxes.
They cover:
- Income tax on your profits
- Self-employment tax (Social Security + Medicare)
- Other obligations like state income tax, if applicable
Instead of waiting until tax day, you spread payments across the year to avoid penalties and big surprises.
Who Has to Pay Quarterly Taxes?
You generally need to pay if:
- You expect to owe $1,000 or more in federal taxes for the year (after withholding and credits).
- You don’t have enough tax automatically withheld (like W-2 employees do).
This includes:
- Sole proprietors
- LLC members
- Freelancers and contractors
- Small business owners
When Are Quarterly Taxes Due?
The IRS splits the year into four payment periods:
| Quarter | Income Covered | Due Date |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15 |
| Q2 | Apr 1 – May 31 | June 15 |
| Q3 | Jun 1 – Aug 31 | Sept 15 |
| Q4 | Sep 1 – Dec 31 | Jan 15 (following year) |
If the due date falls on a weekend or holiday, the deadline moves to the next business day.
How Do You Calculate What to Pay?
The IRS wants you to pay the smaller of:
- 90% of your current year’s total tax, OR
- 100% of last year’s total tax (110% if you’re a high earner).
Many business owners use:
- Form 1040-ES (includes worksheets)
- Accounting software or a tax professional to run the numbers
How Do You Make Payments?
You have a few easy options:
- IRS Direct Pay (free, from your bank account)
- EFTPS (Electronic Federal Tax Payment System)
- Credit/Debit Card (fees apply)
- Mailing a check with Form 1040-ES
Tip: Set calendar reminders so you never miss a deadline.
Why Quarterly Payments Matter
- Avoid penalties for underpayment
- Stay on top of cash flow
- Prevent April surprises by paying throughout the year
Pro Tip
Quarterly taxes don’t have to be overwhelming. Set aside a percentage of every dollar you earn into a separate “tax account.” That way, when the deadline comes, the money is already waiting.
Need Guidance?
If quarterly taxes feel complicated, you don’t have to figure it out alone. Contact me to discuss strategies that fit your business and help you stay on track.
