Why quarterly taxes exist (and why you can't just ignore them)
When you have a regular job, your employer takes taxes out of every paycheck and sends them to the IRS for you. You never see that money. It just vanishes, like socks in a dryer. Convenient.
When you're self-employed, nobody does that. The money hits your bank account whole and untouched and beautiful, and you think "wow, I'm doing great." You are not doing great. A significant chunk of that money belongs to the government. They just haven't come for it yet.
The IRS does not want to wait until April to collect. They want their money in four installments throughout the year. These are called estimated tax payments, and if you skip them, they charge you a penalty. Because of course they do.
The four due dates (mark your calendar or else)
You owe estimated taxes four times a year:
- April 15 — for income earned January through March
- June 15 — for April and May (yes, only two months, it's weird)
- September 15 — for June through August
- January 15 (next year) — for September through December
Notice how the periods aren't even? Three months, then two, then three, then four. Nobody said the tax code had to make sense. If a due date falls on a weekend or holiday, it moves to the next business day — which is the nicest thing the IRS has ever done for anyone.
How much do you actually owe?
Your quarterly payment covers two separate taxes that are both going to hurt:
- Self-employment tax (15.3%)— Social Security and Medicare. This one is a flat percentage and doesn't care about your deductions, your filing status, or your feelings.
- Federal income tax — based on your tax bracket. This one at least acknowledges that you have a standard deduction.
Add them together, subtract any tax already being withheld from other sources (like a W-2 job), divide by four. That's your quarterly payment. The calculator above does this for you because life is hard enough.
The safe harbor rule (your get-out-of-penalty card)
Here's the thing about estimated taxes — the IRS knows you're guessing. Your income might be wildly different from what you projected. So they have a "safe harbor" rule:
- Pay at least 100% of last year's total tax (divided into four payments), and you won't owe a penalty — even if you end up owing more in April.
- If your AGI was over $150,000 last year, the threshold is 110%of last year's tax. Because apparently making more money means you should also be better at predicting the future.
This is genuinely useful if your income is unpredictable. Just base your quarterly payments on last year, and deal with the difference in April. No penalty. The IRS will send you a bill or a refund and everyone moves on with their lives.
What happens if you don't pay quarterly
The underpayment penalty is basically interest on what you should have paid. It's calculated at the federal short-term rate plus 3 percentage points, compounded daily. As of 2026, that's roughly 7-8%.
It's not catastrophic, but it's also not nothing. On $10,000 of underpaid tax, you might owe $300-400 in penalties. That's a nice dinner you didn't get to eat.
Frequently asked questions
Do I have to pay quarterly taxes in my first year of freelancing?
Technically, if you had no tax liability last year (because you were a W-2 employee and your withholding covered everything), you might be safe under the safe harbor rule. But if you expect to owe $1,000 or more in tax this year, the IRS says you should be making quarterly payments. The safest move is to just start paying. Future you will be grateful.
Can I pay more in one quarter and less in another?
Yes. You can use the "annualized income installment method" (Form 2210, Schedule AI) to pay based on when you actually earned the money. This is useful if your income is seasonal — like if you made $0 in Q1 and $80,000 in Q4. But the paperwork is annoying. Most people just divide by four and call it a day.
What if I also have a W-2 job?
If you have a day job with withholding, that withholding counts toward your total tax bill. You might be able to increase your W-2 withholding (by adjusting your W-4) to cover your freelance taxes too, which means you wouldn't need to make separate quarterly payments. Some people find this easier than writing checks to the IRS four times a year. Both approaches are valid.