Quarterly Estimated Taxes: A Plain-English Guide for Business Owners
If you're self-employed or run a business, the IRS expects you to pay tax as you earn it. Miss a quarterly payment and you could owe penalties — even if you pay in full by April.
Why quarterly payments exist at all
The U.S. tax system is pay-as-you-go. Employees have tax withheld from every paycheck, so they're paying throughout the year without thinking about it. Business owners and the self-employed have no such withholding.
To keep everyone on the same footing, the IRS asks the self-employed to make estimated payments four times a year. Skip them and you can face an underpayment penalty — even if you pay your full balance at filing time.
The 2026 due dates
Estimated taxes are generally due four times a year. Each payment covers the income you earned in the preceding period, so falling behind early in the year is hard to fix later.
- April 15, 2026 — first quarter
- June 15, 2026 — second quarter
- September 15, 2026 — third quarter
- January 15, 2027 — fourth quarter
How much to pay: the safe harbor
You can avoid penalties by paying at least 90% of your current year's tax or 100% of last year's total (110% if your income is high). This 'safe harbor' is often the simplest target.
For many owners, basing quarterly payments on last year's return and truing up at year-end is the least stressful way to stay penalty-free.
Don't tie up cash you don't need to
Overpaying your estimates just hands the government an interest-free loan until you file. That's cash your business could be using.
We recalculate estimates on your real, current numbers each quarter, so you pay enough to stay penalty-free without parking excess cash with the IRS.
Want help applying this to your situation?
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