If you are self-employed, a freelancer, a landlord, or receive significant income without tax withholding, you likely need to make quarterly estimated tax payments.
You generally must pay estimated tax if you expect to owe $1,000 or more in tax after subtracting withholding and refundable credits. This applies to self-employment income, rental income, investment income, alimony received, and any other income not subject to withholding.
The 2025 quarterly deadlines are: Q1 (January to March) — due April 15, 2025. Q2 (April to May) — due June 16, 2025. Q3 (June to August) — due September 15, 2025. Q4 (September to December) — due January 15, 2026.
To calculate your quarterly payment, estimate your total tax for the year, subtract any withholding from W-2 jobs, and divide the remainder by four. The simplest safe harbor method is to pay 100% of last year's total tax divided by four (110% if your AGI was above $150,000). This avoids underpayment penalties regardless of how much you actually owe.
Alternatively, you can use the annualized income installment method if your income varies significantly throughout the year. This requires more calculation but can result in lower estimated payments during low-income quarters.
Penalties for underpayment are calculated as interest on the underpaid amount for the period it was underpaid. The current IRS interest rate is approximately 7-8%. While not enormous, it adds up and is completely avoidable.
Payment methods include IRS Direct Pay (free), Electronic Federal Tax Payment System (EFTPS), credit or debit card (processing fees apply), or mailing a check with Form 1040-ES.
Many self-employed individuals also need to make state estimated tax payments using their state's equivalent form.
Use our self-employment tax calculator to estimate your quarterly payment amount.