Estimated Taxes for the Self-Employed
By Angel Quintana, EA · June 27, 2026
When you work for an employer, taxes come out of every paycheck automatically. When you work for yourself, that job becomes yours. The IRS expects you to pay tax as you earn it, in four installments a year, and missing them can mean penalties even if you pay in full by April. Here is how quarterly estimated taxes work and how to stay ahead of them.
Who has to pay quarterly
In general, you need to make estimated payments if you expect to owe at least $1,000 in tax for the year after withholding. That covers most self-employed people and business owners: freelancers, contractors, sole proprietors, single-member LLCs, and S-Corp owners on the portion not covered by payroll withholding.
If you also have a W-2 job, the withholding from that paycheck counts, so you may only need to cover the gap on your self-employment income.
What the payments actually cover
Your quarterly payments cover two things:
- Income tax on your business profit.
- Self-employment tax, which is Social Security and Medicare on your net earnings (15.3% on the first portion, then 2.9% above the Social Security wage base).
That second piece surprises a lot of new business owners. You can estimate it in seconds with our self-employment tax calculator, and check the income-tax side with the federal tax bracket calculator.
How much to pay: the safe harbor
You do not have to predict your tax to the dollar. The IRS gives you a “safe harbor”: pay enough during the year and you avoid the underpayment penalty even if you still owe a balance at filing. You generally meet it by paying the smaller of:
- 90% of what you owe for the current year, or
- 100% of what you owed last year (110% if your prior-year income was high).
For most owners, basing your payments on last year’s tax is the simplest way to stay safe while your income grows.
2026 due dates
Estimated taxes are due four times a year. For the 2026 tax year the dates are:
- Q1: April 15, 2026
- Q2: June 15, 2026
- Q3: September 15, 2026
- Q4: January 15, 2027
If a date falls on a weekend or holiday, it moves to the next business day. Mark them now, because the penalty is calculated per quarter, not just at year end.
How to avoid penalties
The underpayment penalty is essentially interest on the tax you should have paid earlier. A few habits keep it at zero:
- Set aside a percentage of every payment you receive so the cash is there when the quarter is due.
- Pay on the safe harbor, not on a guess, so a great year does not create a surprise penalty.
- Revisit your numbers mid-year if income jumps, and raise your remaining payments.
If you fell behind this year, do not panic. Paying the next installment on time limits the damage, and an Enrolled Agent can often reduce or remove penalties through the proper IRS channels.
Make it part of a plan
Quarterly taxes are easier when they are part of a year-round tax strategy instead of a scramble every few months. And if your self-employment tax bill is large, it may be a sign that an S-Corp election could lower it. Run the comparison with our S-Corp Tax Savings Calculator, then talk it through with Angel Quintana, EA.
This article is general information, not tax advice. Your situation is unique. Book a strategy session for a recommendation tailored to your business.