If you're a freelancer, independent contractor, or gig worker, you've probably heard about quarterly estimated taxes. Unlike traditional W-2 employees who have taxes automatically withheld from each paycheck, self-employed individuals are responsible for paying their taxes throughout the year.
What Are Quarterly Estimated Taxes?
Quarterly estimated taxes are periodic tax payments made by individuals who don't have taxes automatically withheld from their income. This typically includes freelancers, independent contractors, sole proprietors, and anyone who receives 1099 income. If you're unsure about your business structure, our guide to LLC vs S-Corp breaks down the differences.
The IRS operates on a "pay-as-you-go" system, meaning they expect to receive tax payments throughout the year, not just one lump sum in April.
You generally need to pay quarterly taxes if you expect to owe at least $1,000 in federal taxes for the year after subtracting withholdings and credits.
2025 Quarterly Tax Deadlines
Quarterly taxes are due four times a year:
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | January 1 - March 31 | April 15, 2025 |
| Q2 | April 1 - May 31 | June 16, 2025 |
| Q3 | June 1 - August 31 | September 15, 2025 |
| Q4 | September 1 - December 31 | January 15, 2026 |
How Much Should You Pay?
There are two safe harbor methods to avoid underpayment penalties:
- 100% of Last Year's Tax: Pay 100% of what you owed last year, divided into four equal payments (110% if AGI over $150K)
- 90% of Current Year's Tax: Estimate what you'll owe this year and pay at least 90% through quarterly payments
Set aside 25-30% of every payment you receive into a separate savings account. (See our detailed guide: How Much Should You Set Aside for Taxes?) This creates a buffer and helps avoid cash flow surprises.
How to Make Quarterly Payments
- IRS Direct Pay: Free electronic payment at irs.gov/payments
- EFTPS: Electronic Federal Tax Payment System for scheduled payments
- Credit/Debit Card: Through IRS-approved processors (fees apply)
- Check or Money Order: Mail with Form 1040-ES voucher
Common Mistakes to Avoid
- Waiting until April to pay
- Underestimating income during good years
- Forgetting state quarterly taxes
- Not keeping payment records
Need Help?
Quarterly taxes can be confusing, especially when your income fluctuates. At TFMA, we specialize in helping freelancers and contractors navigate their tax obligations. Book a free consultation to discuss your specific situation.