If you're self-employed, a freelancer, a 1099 contractor, or a small business owner, you're responsible for paying your own taxes throughout the year — not just once in April. Missing these payments or underpaying can result in a penalty from the IRS, even if you pay everything you owe by Tax Day. This guide explains exactly how quarterly estimated taxes work and how to calculate them correctly for 2026.
Who must pay quarterly estimated taxes?
You're generally required to pay estimated taxes if you expect to owe $1,000 or more in federal taxes after subtracting withholding and credits for the year. This usually applies to:
- Freelancers and consultants with 1099 income
- Sole proprietors and single-member LLCs
- Partners in partnerships
- S-corporation shareholders who receive distributions
- Anyone with significant investment income, rental income, or capital gains not covered by withholding
2026 quarterly tax due dates
| Quarter | Income Period | Due Date | What to Do |
|---|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15, 2026 | Pay 1040-ES payment #1 |
| Q2 | Apr 1 – May 31 | June 16, 2026 | Pay 1040-ES payment #2 |
| Q3 | Jun 1 – Aug 31 | September 15, 2026 | Pay 1040-ES payment #3 |
| Q4 | Sep 1 – Dec 31 | January 15, 2027 | Pay 1040-ES payment #4 |
How quarterly taxes are calculated
Your quarterly payment is one quarter of your estimated annual tax liability. To find that, you need to work through three components:
Step 1: Calculate your self-employment (SE) tax
This is often the biggest surprise for new freelancers. As a self-employed person, you pay both the employee and employer sides of FICA:
Social Security (12.4%) applies up to $184,500 of wages in 2026
Medicare (2.9%) applies to all SE income (no cap)
Additional Medicare (0.9%) applies above $200,000 (single)
The 92.35% multiplier accounts for the fact that you can deduct half of your SE tax from gross income before calculating the SE tax base. It sounds circular, but that's the IRS formula.
Step 2: Calculate your federal income tax
Start with your expected gross income from all sources, then subtract:
- Business expenses (home office, equipment, subscriptions, mileage)
- Deductible half of SE tax (calculated in Step 1)
- Self-employed health insurance premiums (if applicable)
- SEP-IRA or Solo 401(k) contributions (if applicable)
- Standard or itemized deduction (2026 standard: $15,000 single, $30,000 MFJ)
This gives you taxable income. Apply the 2026 federal tax brackets:
| Taxable Income (Single) | Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,925 – $48,475 | 12% |
| $48,475 – $103,350 | 22% |
| $103,350 – $197,300 | 24% |
| $197,300 – $250,525 | 32% |
| $250,525 – $626,350 | 35% |
| Over $626,350 | 37% |
Step 3: Add SE tax + income tax, subtract any withholding
Less: W-2 withholding (if any)
= Net tax to pay quarterly
Each quarterly payment = Net tax ÷ 4
A worked example
Let's say you're a freelance consultant, filing Single, expecting $85,000 in net self-employment income and no other income:
| Step | Amount |
|---|---|
| Net SE income | $85,000 |
| SE tax (85,000 × 92.35% × 15.3%) | $12,015 |
| Deductible half of SE tax | − $6,008 |
| Standard deduction (single, 2026) | − $15,000 |
| Taxable income | $63,992 |
| Federal income tax (from brackets) | $9,380 |
| Total annual tax (SE + FIT) | $21,395 |
| Each quarterly payment | $5,349 |
Calculate your quarterly payments instantly
Our calculator does all the steps above automatically — just enter your income and filing status
How to avoid the underpayment penalty
The IRS charges an underpayment penalty if you don't pay enough through withholding and estimated payments during the year. You can avoid the penalty by meeting one of these safe harbor rules:
- 90% rule: Pay at least 90% of this year's actual tax liability throughout the year
- Prior year rule: Pay 100% of last year's total tax bill (110% if your AGI was over $150,000)
How to actually pay
The easiest way is online through the IRS Direct Pay system (free, no account needed) or EFTPS (Electronic Federal Tax Payment System). You can also mail Form 1040-ES with a check.
- IRS Direct Pay: pay.irs.gov — no registration required, pay directly from bank account
- EFTPS: eftps.gov — requires registration, better for recurring payments
- IRS2Go app: Mobile app for quick payments
State quarterly taxes
Most states with an income tax also require estimated quarterly payments on the same schedule as the IRS (some states use slightly different dates). Check your state revenue department's website for your state-specific form and due dates.
Common mistakes to avoid
- Forgetting SE tax: Many first-year freelancers budget for income tax but forget the 15.3% SE tax, which can double their tax bill
- Not tracking business expenses: Every deductible expense reduces your taxable income — keep receipts for home office, mileage, equipment, and professional subscriptions
- Waiting until April: Underpayment penalties accrue from the due date of each quarterly payment, not just at tax time
- Underestimating a good year: If your income is growing, base payments on actual YTD earnings rather than last year's numbers