Quarterly Estimated Taxes: Deadlines, Safe Harbors and How Much to Pay

Under IRS Publication 505, you generally must make estimated payments if both are true:

• You expect to owe at least $1,000 in federal tax for the year after subtracting withholding and refundable credits, and
• Your withholding and credits will cover less than the smaller of 90% of this year's tax or 100% of last year's tax.

Typical cases: 1099 contractors, gig workers, sole proprietors, partners, people with significant rental, dividend or capital gains income, and W-2 employees with a profitable side business.

The "quarters" are not equal: Q2 covers only two months and Q4 four. When a date falls on a weekend or federal holiday, the deadline moves to the next business day. Federally declared disaster areas sometimes get postponements — check IRS announcements if that applies to you.

You will not owe an underpayment penalty if your total timely payments equal at least:

• 90% of the tax shown on this year's return, or
• 100% of the tax shown on last year's return (a full 12-month year), or
• 110% of last year's tax if last year's adjusted gross income was over $150,000 ($75,000 if married filing separately).

The prior-year safe harbor is the most popular because it is known in advance: take last year's total tax (line "total tax" on Form 1040), multiply by 100% or 110%, subtract expected withholding, and divide by four. Even if your income jumps, you will owe the difference in April but no penalty.

Jordan's total tax last year was $14,000 and AGI was $120,000. This year Jordan expects freelance income to grow and has $4,000 withheld from a part-time W-2 job.

Jordan pays $2,500 on each due date and is protected from the penalty regardless of how much the final tax turns out to be. Try your own figures in our quarterly tax calculator.

The underpayment penalty is calculated on Form 2210 at the IRS underpayment interest rate (the federal short-term rate plus 3 percentage points, reset quarterly), for each day each installment was short. It is not a flat fine: paying late in the year costs less than not paying at all. If your income is lumpy — for example, a big project in November — the annualized income installment method on Form 2210 can reduce or eliminate the penalty for early quarters. Estimate your exposure with our estimated tax penalty calculator.

• IRS Direct Pay — free bank transfer, no registration.
• IRS Online Account — shows your payment history and balance.
• EFTPS — the Treasury's free system, useful for scheduling payments months ahead.
• Debit or credit card through IRS-approved processors (fees apply).
• Check with a Form 1040-ES voucher.

W-2 employees have a shortcut: increasing withholding through Step 4(c) of the W-4. Withholding is treated as paid evenly throughout the year, so extra withholding in December can cover a shortfall from earlier quarters — something a late estimated payment cannot do.

Most states with an income tax have their own estimated payment rules and due dates, which usually mirror the federal calendar but not always. California, for example, weights its installments unevenly (30% / 40% / 0% / 30%). Check your state revenue department or our state pages.