Quarterly Estimated Taxes: Who Must Pay, How Much, and When

If you are self-employed, a freelancer, a landlord, or an investor with significant income, you likely have no taxes withheld from your earnings. The IRS expects to be paid as you go, not all at once in April — and that is where quarterly estimated taxes come in.

The four payment deadlines fall in mid-April, mid-June, mid-September, and mid-January of the following year. Missing a deadline triggers an underpayment penalty that accrues daily at the federal short-term rate plus 3%.

You can avoid the penalty entirely with a safe harbor. If you pay at least 90% of the current year's tax or 100% of the prior year's tax (110% if your adjusted gross income was over $150,000), no penalty applies — even if you owe a large balance at filing.

Estimating each payment is straightforward: project your annual income and deductions, calculate the expected tax, subtract any withholding, and divide the remainder into four. Many self-employed filers use the prior-year safe harbor for simplicity and true up at year-end.

The discipline of quarterly payments also smooths your cash flow. Setting aside 25–30% of every payment you receive prevents the April shock that derails so many small businesses.