Employees have tax withheld from each paycheck. Freelancers, sole proprietors, partners and many LLC owners do not, so the IRS expects them to make estimated payments during the year. Missing or underpaying them can lead to an underpayment penalty even if you pay the full bill by the filing deadline.
Who generally needs to pay
- Self-employed people and independent contractors
- Owners of sole proprietorships, partnerships and S-corporations whose profit passes through to their personal return
- People with significant income not subject to withholding, such as rental income, investment gains or interest
The usual test: if you expect to owe $1,000 or more in federal tax for the year after withholding and credits, you should generally be making estimated payments. C-corporations make their own estimated payments using the corporate rules.
Due dates for the 2026 tax year
| Payment | Covers income earned | Due date |
|---|---|---|
| 1st quarter | January 1 to March 31 | April 15, 2026 |
| 2nd quarter | April 1 to May 31 | June 15, 2026 |
| 3rd quarter | June 1 to August 31 | September 15, 2026 |
| 4th quarter | September 1 to December 31 | January 15, 2027 |
The periods are not equal quarters, which surprises many people. When a due date falls on a weekend or holiday, it moves to the next business day. State estimated tax deadlines often follow the federal ones but not always.
How much to pay: safe harbor rules
You generally avoid an underpayment penalty if your payments and withholding total at least the smaller of:
- 90% of the tax for the current year, or
- 100% of the tax shown on last year's return (110% if last year's adjusted gross income was over $150,000)
The prior-year method is predictable, which is why many owners choose it. If your income is uneven, such as seasonal sales, the annualised income method can reduce early-year payments.
Self-employment tax
Besides income tax, self-employed people pay Social Security and Medicare tax, known as self-employment tax. The combined rate is 15.3% on net earnings, with the Social Security portion applying only up to an annual wage base. Include it when calculating your payments, and remember that part of it is deductible.
How to pay
- Online through IRS Direct Pay or an IRS online account
- Through EFTPS if you enrol in advance
- By mail with a Form 1040-ES voucher
Keep confirmation numbers. Make sure the payment is applied to the correct tax year and form type.
How bookkeeping helps
You cannot estimate profit without current books. A monthly close shows year-to-date profit, which allows you to project the tax and set money aside. Many clients move a fixed percentage of every payment into a separate tax account. See our monthly bookkeeping checklist.
Non-residents and foreign-owned companies
Non-resident individuals with US-connected income may also owe estimated payments. A foreign-owned LLC with no US-source or US-connected income may owe nothing. Review your position before assuming either way. See whether non-residents pay US tax on LLC income.
For help calculating and filing, see our US tax preparation service and the key tax deadlines page.
Frequently asked questions
When are quarterly estimated taxes due?
For the 2026 tax year: April 15, June 15, September 15 and January 15, 2027.
How can I avoid an underpayment penalty?
Pay at least 90% of this year's tax or 100% of last year's tax (110% if your prior-year income was over $150,000), spread across the four deadlines.
Do LLC owners pay quarterly estimated taxes?
Owners of pass-through LLCs generally do, because profit is taxed on their personal return and there is no employer withholding.
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