Who needs to pay quarterly estimated tax?
The US tax system is pay-as-you-go. Employees have tax withheld from each paycheck, but freelancers and business owners usually don't, so the IRS expects you to send payments during the year with Form 1040-ES. You generally need to make them if you expect to owe at least $1,000 when you file.
How this calculator estimates your payments
It projects this year's tax, then applies the safe harbor rules. You avoid an underpayment penalty if your withholding plus estimated payments cover the smaller of:
- 90% of this year's total tax, or
- 100% of last year's total tax (110% if your adjusted gross income is over $150,000).
Required = min(90% × Projected tax, Prior-year tax × 100% or 110%)
Quarterly payment = (Required − Withholding) ÷ 4
Example
A single consultant expecting $80,000 of profit, with no other income, owes about $11,304 of SE tax. If last year's total tax was $14,000, paying $3,500 a quarter meets the prior-year safe harbor even if this year's tax turns out higher.
Tips
- The prior-year safe harbor is the easiest to plan around because the number is already known.
- If income is lumpy, the annualized installment method (Form 2210, Schedule AI) can reduce early payments.
- Most states have their own estimated payments. This calculator covers federal tax only.
Frequently asked questions
When are 2026 estimated tax payments due?
April 15, June 15 and September 15, 2026, and January 15, 2027. When a date falls on a weekend or holiday, it moves to the next business day.
What is the QBI deduction?
The qualified business income deduction lets many sole proprietors deduct up to 20% of business income. Higher earners in some service fields face limits this calculator doesn't model.
What happens if I underpay?
The IRS charges an underpayment penalty that works like interest on the shortfall for each quarter. It's usually modest but avoidable.