Quarterly Estimated Taxes
Authority: IRC §6654; Form 1040-ES
Quarterly estimated taxes are the prepayments the IRS requires from anyone whose income is not covered by withholding: business owners, freelancers, landlords, and investors. The U.S. system is pay-as-you-earn, so waiting until April to pay a year's tax triggers an underpayment penalty even if the return is filed on time and paid in full. Federal payments for a tax year are due in four installments, generally April 15, June 15, September 15, and January 15 of the following year, shifting to the next business day for weekends and holidays. Note the uneven periods: the second payment covers only April and May. Each installment should cover income tax plus self-employment tax on that period's earnings, or the taxpayer can rely on a safe harbor based on last year's tax. Most income-tax states run a parallel quarterly system with their own vouchers and portals.
Example
A consultant expecting $60,000 of total federal tax for 2026 pays $15,000 on each of April 15, June 15, and September 15, 2026 and January 15, 2027, avoiding any underpayment penalty.
Related terms
Safe Harbor (Estimated Payments)
The estimated tax safe harbor is the rule that guarantees no underpayment penalty regardless of what the current...
Estimated Tax Penalty
The estimated tax penalty is interest the IRS charges when tax is paid too late within the year, even if the return...
Self-Employment Tax
Self-employment tax is how sole proprietors, general partners, and most active LLC members pay Social Security and...
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