Q3 Estimated Taxes: What Small Business Owners Need to Do Before September 15

If you're a small business owner, freelancer, or self-employed professional, September 15 is one of the most important dates on your tax calendar. That's the deadline for your Q3 estimated tax payment — and missing it (or underpaying) can trigger IRS penalties that add up fast.

Here's what you need to know and do before that deadline hits.

When you work for an employer, taxes are withheld from every paycheck automatically. When you're self-employed or running a business, that doesn't happen. The IRS expects you to pay taxes as you earn income — four times a year — through estimated tax payments.

Miss a payment or underpay, and you'll face an underpayment penalty on top of whatever you owe at filing. In 2026, that penalty rate is tied to the federal short-term rate plus 3% — currently around 8% annualized. It's not catastrophic, but it's money you didn't have to spend.

Here's the full schedule for the year:

There are two safe-harbor methods the IRS accepts:

Method 1: Pay 100% of last year's tax liability (110% if your prior-year AGI was over $150,000). This is the simplest approach — look at your prior-year Form 1040, find your total tax, divide by four, and pay that each quarter.

Method 2: Pay 90% of your current-year estimated liability. This requires more math but can save you money if your income is lower this year than last.

Most small business owners use Method 1 because it's predictable and eliminates the risk of underpayment penalties entirely — even if your income turns out to be higher than expected.

The IRS makes this straightforward. You have three options:

1. IRS Direct Pay at irs.gov/payments — free, instant, no account required
2. EFTPS (Electronic Federal Tax Payment System) — best for businesses making regular payments; requires a one-time enrollment
3. Mail a check with Form 1040-ES — works, but slower and harder to track

Most small business owners use IRS Direct Pay for its simplicity. Just select "Estimated Tax," choose the correct tax year and quarter, and pay.

Pay what you can. A partial payment is always better than no payment — it reduces the penalty calculation. If cash flow is tight, consider:

• Reviewing your Q3 income and expenses to see if your estimate is accurate
• Checking whether you qualify for a lower payment under Method 2
• Setting aside a fixed percentage of every invoice payment going forward (25–30% is a common rule of thumb for self-employed individuals)

If you're in Texas, you're in luck — Texas has no state income tax, so there's no state estimated payment to worry about. If you operate in other states, check those deadlines separately; they often mirror the federal schedule but not always.

Here's the thing most small business owners miss: Q3 estimated taxes are just the immediate deadline. The more important opportunity is what happens between now and December 31.

Q4 is when the real tax-saving moves happen:

• Maxing out retirement contributions (SEP-IRA, Solo 401k)
• Timing large equipment purchases to capture Section 179 deductions
• Reviewing your entity structure — an S-Corp election could save you thousands in self-employment tax
• Accelerating deductible expenses into this tax year

These decisions can't be made in January. By then, the year is over and the opportunities are gone.

If you want to make sure you're not leaving money on the table, book a free 15-minute tax planning consultation with our team. We'll review your situation and tell you exactly what moves to make before December 31 — no pressure, no sales pitch.

• Calculate your Q3 estimated payment (use last year's tax as a baseline)
• Log in to IRS Direct Pay or EFTPS
• Submit payment by September 15
• Note your confirmation number
• Start thinking about Q4 year-end tax moves

The September 15 deadline is close. Don't let it sneak up on you.