The first year of self-employment comes with a rude surprise: nobody is withholding taxes from your income, and the IRS doesn’t want to wait until April to collect. It expects you to pay as you earn — four times a year — and it charges a penalty when you don’t.
Why quarterlies exist
The U.S. tax system is pay-as-you-go. Employees satisfy it invisibly through paycheck withholding. The self-employed satisfy it visibly, by writing four checks. Same obligation, worse ergonomics.
Who has to pay
In general, you need to make estimated payments if you’ll owe at least $1,000 when you file, after subtracting withholding and credits. That sweeps in freelancers and gig workers, business owners taking draws, landlords with meaningful rental profit, and investors with significant untaxed income. If you also have a W-2 job, you can often skip quarterlies entirely by increasing your paycheck withholding instead — frequently the most convenient fix there is.
The 2026 due dates
- Q1: April 15, 2026
- Q2: June 15, 2026 (yes, only two months later)
- Q3: September 15, 2026
- Q4: January 15, 2027
Note the uneven spacing — the “quarters” are 3, 2, 3, and 4 months long. The June date catches new payers off guard more than any other.
How much to send
Estimate your year: net self-employment profit, other income, deductions. From that, two taxes matter — regular income tax on your taxable income, and self-employment tax (15.3% on most of your net profit, covering Social Security and Medicare). Add them, subtract any withholding, divide by four.
Our quarterly estimates calculator does this arithmetic for you. The harder part is honest forecasting — which is why we revisit clients’ estimates every quarter as real numbers come in.
Safe harbor: your penalty shield
You don’t need a perfect forecast. You need to pay in enough to reach safe harbor — then April can hold no penalties, only a bill you planned for.
The IRS won’t penalize you if your payments plus withholding reach at least one of these targets:
- 90% of this year’s actual tax, or
- 100% of last year’s total tax — 110% if your prior-year AGI topped $150,000.
The prior-year target is the planner’s favorite because it’s a known, fixed number. Income doubling this year? Pay 110% of last year’s tax on schedule, bank the difference for April, and you’re penalty-proof while keeping the cash working for you until it’s due.
A system that makes it painless
- Separate the money on arrival. Move 25–35% of every payment received into a dedicated tax savings account. What’s in checking is yours; what’s in the tax account never was.
- Pay online. IRS Direct Pay or an IRS Online Account beats vouchers and stamps, and gives instant confirmation. Don’t forget your state — Pennsylvania and most others run parallel estimate systems.
- Recalculate at midyear. June and September are checkpoints, not just due dates. Adjust remaining payments to reality.
Quarterlies are a forecasting problem, and forecasting is our home turf. Have us set your numbers once a year — then just pay the four bills we hand you.
