When Are Quarterly Estimated Taxes Due?

The Four Quarterly Due Dates

The IRS splits the tax year into four uneven payment periods. They don’t follow calendar quarters, which trips people up. The schedule stays the same every year unless a due date falls on a weekend or federal holiday, in which case it shifts to the next business day (IRS Estimated Tax FAQ).

• Q1 — April 15: Covers income earned January 1 through March 31
• Q2 — June 15: Covers income earned April 1 through May 31 (yes, only two months)
• Q3 — September 15: Covers income earned June 1 through August 31
• Q4 — January 15 of the following year: Covers income earned September 1 through December 31

That second period catching only two months of income is the one people forget. You get your first payment out the door in April, feel like you have breathing room, and then June shows up eight weeks later. Mark all four dates in whatever calendar you actually check.

Who Needs to Pay Quarterly

The general rule: if you expect to owe $1,000 or more in federal tax after subtracting withholding and credits, the IRS wants quarterly payments. That catches more people than you’d think.

Freelancers and sole proprietors are the obvious group. No employer is withholding anything, so 100% of the tax responsibility falls on you. But the list goes well beyond that.

Gig workers and side hustlers with a W-2 job sometimes assume their employer withholding covers everything. It won’t if the side income is meaningful. A $15,000 Etsy shop or a few thousand from rideshare driving can easily push you past that $1,000 threshold.

Landlords collecting rent, investors with dividend or capital gains income, and retirees drawing from traditional IRAs or pensions without adequate withholding all fall into the same bucket. So do S-corp and partnership owners receiving K-1 income — the entity doesn’t pay your personal tax for you.

If you’re a W-2 employee with no other income and your withholding is set correctly, you’re off the hook. Everyone else should run the numbers.

How to Calculate What You Owe

There are two ways to stay out of penalty territory, and you only need to satisfy one of them. The IRS calls these the “safe harbor”. Rules, outlined in IRC Section 6654.

Option 1: Pay 100% of Last Year’s Tax

Take whatever your total tax was on last year’s return (line 24 on Form 1040) and divide it by four. Pay that amount each quarter. If your adjusted gross income was above $150,000 ($75,000 if married filing separately), the threshold bumps to 110% of last year’s tax instead of 100%.

This method works well if your income is relatively stable year over year. You don’t need to project anything — just look at the prior return and do the math. Even if you earn significantly more this year, you won’t owe a penalty as long as you’ve met the safe harbor.

Option 2: Pay 90% of This Year’s Tax

If you know what you’ll earn — maybe you have a contract with a fixed fee, or your rental income is predictable — you can estimate this year’s total tax and pay 90% of it across the four quarters. This approach makes sense when your income dropped sharply from last year. Paying based on a big prior-year number when your current income is half that ties up cash you don’t need to part with yet.

Most CPAs recommend the prior-year method for clients whose income bounces around. It’s simpler and eliminates guesswork. But if last year was unusually high, the current-year method saves you from overpaying.

Form 1040-ES and How to Actually Pay

Form 1040-ES is the worksheet the IRS provides for calculating estimated taxes. You don’t file the form itself — it’s a calculation tool. The worksheet walks through expected income, deductions, credits, and self-employment tax to land on a quarterly payment amount.

Once you know the number, you have several payment options. IRS Direct Pay (pay.irs.gov) pulls directly from a bank account with no fee. EFTPS (Electronic Federal Tax Payment System) requires enrollment but lets you schedule payments in advance. You can also pay by credit or debit card through third-party processors, though they charge a convenience fee — roughly 1.85% for credit cards. For the organized, setting up automatic quarterly payments through EFTPS is the closest thing to “set it and forget it”. For self-employed taxes.

If you’re a W-2 employee with side income, there’s another option: increase your withholding at your day job by filing a new W-4. The IRS doesn’t care whether the money comes from estimated payments or payroll withholding. Extra withholding from a W-4 is treated as paid evenly throughout the year, so it can cover a gap without worrying about quarterly timing.

State Quarterly Requirements

Federal isn’t the only deadline. Most states with an income tax also require quarterly estimated payments, and the thresholds vary. New York, for example, requires estimated payments if you expect to owe more than $300 in state tax. California’s threshold is different. Some states follow the federal due dates exactly. Others don’t.

If you live in one state and work in another, or if you have rental property across state lines, you could be making quarterly payments to two or three jurisdictions. Each one has its own form, its own thresholds, and its own penalty calculations. New York City residents get an added layer — NYC personal income tax has its own estimated payment requirements on top of NYS.

Don’t assume your state follows the federal rules. Check your state’s department of revenue website or ask your CPA which forms to file and when.

What Happens When You Miss a Payment

The IRS charges an underpayment penalty calculated on a quarterly basis. It’s not a flat fee — it’s essentially interest on the amount you should have paid, running from the due date until you actually pay it or until April 15 of the following year, whichever comes first.

The penalty rate is the federal short-term rate plus 3 percentage points, recalculated quarterly (IRC Section 6621). In recent years that rate has been between 7% and 8% annualized. On a $5,000 underpayment for one quarter, you’re looking at roughly $100 to $150 in penalties. Not catastrophic, but it adds up if you skip multiple quarters.

Here’s what surprises people: you can owe the underpayment penalty even if you’re getting a refund. If you didn’t pay enough during the year on a quarterly basis but your total payments (including a big Q4 catch-up) cover the full tax, the IRS still penalizes you for the quarters you were short. The penalty is calculated per period, not on the annual balance.