Employees have taxes withheld from every paycheck. Business owners do not—so the IRS expects you to pay as you go through quarterly estimated taxes. Miss them and you can owe penalties even if you pay in full at year-end.
Who has to pay quarterly estimated taxes?
Generally, if you expect to owe $1,000 or more in tax for the year after withholding, you are required to make quarterly estimated payments. This applies to most self-employed people, freelancers, and owners of pass-through businesses like LLCs and S-corps.
When are estimated taxes due?
Estimated taxes are typically due four times a year—around mid-April, mid-June, mid-September, and mid-January of the following year. The exact dates shift slightly each year, so confirm them annually.
How do you calculate estimated taxes?
You estimate your expected annual income, deductions, and tax, then pay it in four installments. Many owners use a "safe harbor"—paying 100% of last year’s tax (110% for higher earners)—to avoid penalties. Getting the number right is easier when your books are current.
We calculate your federal and state estimates so you never get surprised by a penalty. See our tax planning & compliance services.