If you're self-employed, a freelancer, an independent contractor, or a business owner, the IRS expects you to pay taxes throughout the year — not just when you file your return in April. These are called estimated tax payments, and they're due quarterly. Missing them (or underpaying) triggers penalties and interest that add up fast. This guide covers every deadline, how to calculate your payments, and strategies to stay on track in 2026.
2026 Quarterly Due Dates
The IRS divides the tax year into four unequal payment periods. Here are the exact due dates for 2026 estimated tax payments:
| Quarter | Income Period | Federal Due Date |
|---|---|---|
| Q1 | January 1 – March 31 | April 15, 2026 |
| Q2 | April 1 – May 31 | June 15, 2026 |
| Q3 | June 1 – August 31 | September 15, 2026 |
| Q4 | September 1 – December 31 | January 15, 2027 |
Note that Q2 only covers two months (April–May) while Q3 covers three (June–August). This is one of the IRS's quirks. It means your Q2 payment may be lower if your income is consistent month-to-month, but most people simply pay equal quarterly installments based on their annual estimate.
Who Needs to Make Quarterly Payments?
You generally need to make estimated tax payments if you expect to owe at least $1,000 in federal tax for the year (after subtracting withholding and credits) and your withholding and credits will be less than the smaller of 90% of your current year tax or 100% of your prior year tax (110% if your AGI exceeded $150,000).
In practice, this applies to most self-employed people, freelancers, and business owners. If your only income comes from W-2 employment with adequate withholding, you likely don't need to make estimated payments. But if you have significant side income, rental income, investment income, or any 1099 income, you probably do.
- •Sole proprietors and single-member LLC owners reporting on Schedule C
- •Independent contractors and freelancers receiving 1099-NEC forms
- •S-Corp owners receiving K-1 distributions (in addition to W-2 salary)
- •Partners in partnerships receiving K-1 income
- •Landlords with rental income not subject to withholding
- •Retirees with significant investment or retirement income without adequate withholding
- •Gig workers (Uber, DoorDash, Etsy sellers, etc.) earning more than a few thousand per year
How to Calculate Your Quarterly Payments
There are two safe harbor methods to avoid underpayment penalties. You only need to meet one of them:
Method 1: 100% of Prior Year Tax
Take your total tax liability from your 2025 return (line 24 on Form 1040), subtract any withholding you expect in 2026, and divide the result by four. Pay that amount each quarter. This is the simplest approach and works well if your income is relatively stable year to year. If your 2025 AGI exceeded $150,000, you need to pay 110% of your prior year tax instead of 100%.
Method 2: 90% of Current Year Tax
Estimate your 2026 income and calculate 90% of the tax you'll owe. Divide by four and pay quarterly. This method requires more forecasting but can result in lower payments if your income is dropping. The risk is that if you underestimate, you could face penalties on the shortfall.
| Scenario | Recommended Method |
|---|---|
| Income similar to last year | 100% of prior year (simplest) |
| Income increasing significantly | 100% of prior year (safe harbor protects you) |
| Income dropping significantly | 90% of current year (lower payments) |
| First year self-employed | 90% of current year (no prior year to reference) |
| AGI over $150K last year | 110% of prior year |
What Taxes Are Included in Estimated Payments?
Your quarterly estimated payment should cover all taxes that aren't being withheld from other income sources. For most self-employed taxpayers, this includes:
Not sure how much to pay each quarter?
A CPA can calculate your estimated payments so you never underpay or overpay.
Get a Payment Estimate- •Federal income tax on your business profit (at your marginal tax rate, which ranges from 10% to 37% in 2026)
- •Self-employment tax: 15.3% on the first $168,600 of net self-employment earnings (12.4% Social Security + 2.9% Medicare), plus 0.9% additional Medicare tax on earnings above $200,000
- •State income tax (rates vary by state — check your state's tax authority for current rates and estimated payment requirements)
A common mistake is only estimating federal income tax and forgetting self-employment tax and state tax. For a self-employed person in the 22% federal bracket, the combined effective rate on business income is roughly 22% + 14.1% (SE tax after the deduction) + state tax = potentially 40% or more. That's why quarterly payments feel large — they need to cover all of these obligations.
Penalties for Missing Quarterly Payments
The IRS charges an underpayment penalty if you don't pay enough estimated tax throughout the year. The penalty is calculated as interest on the underpaid amount for the period it was underpaid, using the federal short-term rate plus 3 percentage points. As of early 2026, this rate is approximately 7%, which means every quarter you underpay costs real money.
- •The penalty is calculated separately for each quarter, so missing Q1 costs more than missing Q4 (because Q1 is underpaid for longer).
- •Most states also charge underpayment penalties, calculated similarly to the federal penalty. Check with your state's tax authority for specific rates.
- •There is no penalty for overpaying — you'll get the excess back as a refund or can apply it to next year's estimates.
- •If you owe less than $1,000 at filing time, no penalty applies regardless of how you paid during the year.
- •If your withholding covers at least 90% of current year tax or 100% of prior year tax (110% for high earners), no penalty applies even if you owe at filing.
Annualized Income Installment Method
If your income is highly seasonal (for example, a landscaper who earns most income in spring and summer), you can use Form 2210 Schedule AI to calculate payments based on when income was actually earned. This can reduce or eliminate penalties for quarters where you had little income, even if you didn't make a payment.
How to Make Your Federal Payments
For federal payments, the IRS offers several options. IRS Direct Pay (irs.gov/directpay) lets you pay for free directly from your bank account. EFTPS (Electronic Federal Tax Payment System) requires enrollment but is the preferred method for business owners making regular payments. You can also pay by credit or debit card through approved processors, though they charge a convenience fee of 1.85-1.98% for credit cards.
Don't Forget About State Estimated Payments
In addition to federal estimated taxes, most states with an income tax also require estimated quarterly payments. The rules, rates, and deadlines vary significantly from state to state. Some states follow the federal due dates exactly, while others have their own schedules. A few states — like Texas, Florida, and Wyoming — have no state income tax at all, so no state estimated payments are needed.
- •Check your state's department of revenue or tax authority website for estimated payment requirements and forms.
- •Some states have lower thresholds for when estimated payments are required (e.g., owing $500+ instead of $1,000+).
- •State estimated payments are typically made through your state's online tax portal — separate from your federal payments.
- •If you've recently moved or work in multiple states, your state tax obligations may be more complex. A CPA can help you determine which states require payments.
- •Many states offer a Pass-Through Entity Tax (PTET) election that can provide additional federal tax benefits for S-Corp and partnership owners. Ask your CPA if this applies to you.
Because every state handles estimated payments differently, this is an area where working with a CPA is especially valuable. A tax professional can identify exactly which states you owe, calculate the right payment amounts, and make sure you don't miss any deadlines or trigger unnecessary penalties.
Strategies to Stay on Track
- •Set calendar reminders 2 weeks before each due date. Don't rely on memory — quarterly payments are easy to forget when you're busy running your business.
- •Open a separate savings account for taxes. Transfer 30-35% of every business payment you receive into this account. When quarterly payments are due, the money is already set aside.
- •Use the prior year safe harbor method if your income is stable or growing. It's simpler and guarantees no penalties, even if you end up owing more at filing time.
- •Review your estimates at mid-year (July). If your business is having a much better or worse year than expected, adjust your Q3 and Q4 payments accordingly.
- •If you also have W-2 income, consider increasing your withholding on your W-2 instead of (or in addition to) making estimated payments. Withholding is treated as paid evenly throughout the year, which can help avoid quarterly timing penalties.
What If You Missed a Payment?
If you've already missed one or more 2026 quarterly payments, don't panic. Make the payment as soon as possible to minimize the penalty period. Then increase your remaining quarterly payments to catch up. The penalty is interest-based, so the sooner you pay, the less it costs.
If you're behind and worried about penalties, a CPA can calculate your exact exposure and recommend the most cost-effective catch-up strategy. Sometimes increasing W-2 withholding (if you have W-2 income) is more effective than making a large estimated payment, because withholding is treated as paid evenly throughout the year by the IRS.
Staying on top of quarterly estimated taxes is one of the most important financial habits for self-employed taxpayers. It prevents a painful surprise at tax time, avoids unnecessary penalties, and keeps your cash flow predictable. If the calculation feels overwhelming, a CPA can set up your quarterly schedule in minutes and save you hours of stress throughout the year.