Estimated Taxes
Estimated taxes are quarterly tax payments made by self-employed individuals, freelancers, and businesses that don't have taxes withheld from their income. The IRS requires them to avoid underpayment penalties.
Estimated Taxes Definition
Estimated taxes are quarterly payments to the IRS (and often your state) to cover income tax and self-employment tax on income that doesn't have taxes automatically withheld. If you're self-employed, a freelancer, or a business owner, you likely need to pay them.
Who Needs to Pay Estimated Taxes?
2026 Quarterly Due Dates
How to Calculate Estimated Taxes
1. Estimate your total income for the year
2. Subtract deductions to get taxable income
3. Calculate tax using current rates + 15.3% self-employment tax
4. Subtract any withholding from W-2 jobs
5. Divide the remaining tax by 4
Safe harbor: Pay at least 100% of last year's tax liability (110% if AGI > $150K) to avoid penalties, even if you owe more.
How to Pay
FAQ
Q: What happens if I miss a quarterly payment?
A: The IRS charges an underpayment penalty — currently around 8% annually on the underpaid amount. Pay as soon as you can to minimize the penalty.
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