Quarterly Estimated Taxes: A Complete Guide for Self-Employed Business Owners
If you're self-employed, you're required to pay taxes four times a year. Here's everything you need to know about quarterly estimated taxes — deadlines, calculations, and how to avoid penalties.
One of the biggest surprises for new business owners is discovering that taxes aren't automatically withheld from their income. Instead, you're responsible for paying estimated taxes four times a year. Miss them and you'll owe penalties — even if you pay everything by April 15.
Who Needs to Pay Estimated Taxes?
You generally need to pay quarterly estimated taxes if:
- You expect to owe at least $1,000 in federal taxes for the year
- Your withholding and credits won't cover at least 90% of your tax liability
This applies to sole proprietors, partners, S-Corp shareholders, and self-employed individuals.
2026 Estimated Tax Due Dates
| Payment Period | Due Date |
|---|---|
| January 1 – March 31 | April 15, 2026 |
| April 1 – May 31 | June 15, 2026 |
| June 1 – August 31 | September 15, 2026 |
| September 1 – December 31 | January 15, 2027 |
How to Calculate What You Owe
There are two safe harbor methods:
Method 1: 90% of current year tax Pay at least 90% of what you'll owe for the current year, spread across four payments.
Method 2: 100% of prior year tax Pay 100% of last year's total tax liability (110% if your AGI exceeded $150,000). This is the safer method if your income is unpredictable.
How to Pay
Pay online at IRS Direct Pay (irs.gov/payments) or through the Electronic Federal Tax Payment System (EFTPS). You can also mail a check with Form 1040-ES.
What Happens If You Miss a Payment?
The IRS charges an underpayment penalty — currently around 8% annualized. It's not catastrophic, but it's avoidable.
State Estimated Taxes
Most states with income tax also require quarterly estimated payments. Texas has no state income tax, so Texas-based business owners only need to worry about federal payments.
For a full list of deductions that reduce your quarterly tax burden, see our tax deductions guide for self-employed Texans.
Related Resources
- Tax Deductions for Self-Employed Texans: The Complete List
- Why Tax Planning Should Happen Year-Round
- 10 Tax Deductions Every Small Business Owner Should Know
- Bookkeeping for Contractors: A Guide for 1099 Workers
- Our Tax Preparation Services
- Contact Us
Need help calculating your quarterly estimated taxes? The Gap ProAdvisors provides tax planning and preparation services for small businesses nationwide. Contact us.
Explore Topics
Share this article
About the author
The Gap ProAdvisorsOwner & Lead Advisor — The Gap ProAdvisors
Angela is a Certified Bookkeeper, QuickBooks ProAdvisor, and IRS Registered Tax Return Preparer (PTIN) with over a decade of experience helping small businesses across Texas get their books right and keep more of what they earn. She founded The Gap ProAdvisors to make professional financial services accessible to every small business owner — no matter where they are.
