Quarterly Tax Estimator

How Quarterly Estimated Taxes Work

Freelancers, business owners and anyone with significant investment income pay their tax in four installments across the year. The IRS wants it as you earn it, not in one lump the following April.

Who must pay quarterly taxes:

You owe quarterly taxes if you expect to owe $1,000 or more in federal tax for the year after withholding and credits.

Due dates, and note that the quarters are not quarters:

Two months, two months, three months, four months. The second payment falls due two months after the first, not three, and that is the one people miss. If a date lands on a weekend or a federal holiday it moves to the next business day.

Two ways to work out what to pay:

Safe harbor, using last year’s number.

Quarterly payment = Prior year total tax ÷ 4

Pay 100% of what you owed last year, or 110% if your prior-year adjusted gross income was above $150,000, and no underpayment penalty can touch you no matter how good this year turns out to be. That 110% catches people out constantly.

The safe harbor is the better method whenever your income is rising, because last year’s tax is a fixed known number in January while this year’s is a guess about December.

Current year, using 90% of what you expect to owe.

Quarterly payment = (Estimated income tax + self-employment tax − withholding) ÷ 4

Better when your income is falling, since it stops you from over-paying against a year that will not repeat.

Self-employment tax:

SE tax = Net self-employment income × 0.9235 × 15.3%

The 0.9235 accounts for the employer-equivalent half being deductible. The 15.3% splits into 12.4% for Social Security, which stops at $184,500 of combined wages and self-employment income in 2026, and 2.9% for Medicare, which never stops. Above $200,000 single or $250,000 joint, another 0.9% of Medicare applies.

That wage base matters more than it looks. On $300,000 of self-employment profit, charging a flat 15.3% produces about $42,400 where the real figure is closer to $31,600.

A trick worth knowing. Tax withheld from a paycheck counts as paid evenly across the year no matter when it was actually withheld, while an estimated payment only counts when you make it. So if you reach December underpaid, and you or a spouse has any W-2 income, raising the withholding on the last few paychecks can fix the whole year retroactively. An estimated payment in December cannot.

State taxes: most states with an income tax want their own quarterly payments, and several use different dates. Check yours separately.

Use IRS Form 1040-ES, and pay through IRS Direct Pay.

If you have a salary as well as freelance income, the estimated quarterly tax calculator takes the two separately and shows the safe-harbor comparison as a side-by-side. It runs the same brackets, the same wage base and the same 110% rule, so both pages give the same quarterly payment.