Quarterly estimated taxes in the US: who pays and 2027 due dates

Quarterly estimated taxes are prepayments of income tax and self-employment tax during the year. In the US, tax is paid as income is earned, not in one lump sum in April. For employees, the employer does this by withholding tax from each paycheck. If you work for yourself, rent out property or earn investment income, nobody withholds for you, so you pay on your own. These payments are called estimated tax, and the form for them is Form 1040-ES.

Who has to pay estimated tax

The main IRS rule: you need to make estimated payments if you expect to owe $1,000 or more when you file, after subtracting withholding and credits.

Most often this applies to:

• self-employed people and freelancers paid on Form 1099 (drivers, couriers, designers, contract developers);
• owners of a single-member LLC, whose profit is reported on the personal return, on Schedule C;
• members of a multi-member LLC taxed as a partnership, on the profit reported to them on Schedule K-1;
• S-corp shareholders, on the profit above their salary;
• anyone with rental income, dividends, interest, or gains from selling stocks or crypto.

For C corporations the threshold is lower, $500, and they follow their own rules.

Who may not need to pay

You don't need estimated payments if withholding from wages covers your tax. And there is no penalty for the current year if all three of these apply:

1. you had no US tax liability last year;
2. you were a US citizen or resident for all of last year;
3. last year's tax year covered a full 12 months.

Estimated tax due dates for 2026–2027

The year is split into four payment periods, but they are not equal calendar quarters: the second period is two months long and the last one is four.

If a due date falls on a weekend or federal holiday, it moves to the next business day. That is why the last 2027 payment is due January 18, 2028: January 15 is a Saturday and January 17 is Martin Luther King Jr. Day.

You can skip the January payment if you file your return for the year and pay all the tax by January 31. This does not change the other three due dates.

Note that two deadlines fall on April 15, 2027: the 2026 return and the first estimated payment for 2027. An extension to file (Form 4868) does not extend the time to pay.

How much to pay: the safe harbor rule

Nobody knows their exact tax in advance, so the IRS offers a safe harbor. There is no penalty if, through withholding and estimated payments, you paid the smaller of:

• 90% of the tax for the current year;
• 100% of the tax for the prior year, or 110% if your prior-year AGI (adjusted gross income) was over $150,000 ($75,000 if married filing separately).

With steady income the second option is easier: take the total tax from last year's return and divide it by four.

How to calculate a payment with Form 1040-ES

Form 1040-ES includes a worksheet for the annual amount. The logic is:

1. Estimate your income for the year: business profit, rent, investments, and wages if you have them.
2. Subtract the standard or itemized deduction and figure the income tax.
3. Add self-employment tax (see below) and any other taxes.
4. Subtract tax credits and any tax already withheld from wages.
5. Compare the result with the safe harbor and take the smaller amount. That is your required annual payment; divide it by four.

Recalculate at least twice a year: if your income has changed noticeably, you can increase or reduce the remaining payments.

Self-employment tax: 15.3%

On top of income tax, self-employed people pay self-employment tax, the Social Security and Medicare contributions that employees split with their employer. The rate is 15.3%:

• 12.4% for Social Security, only on earnings up to the wage base ($184,500 in 2026);
• 2.9% for Medicare, on all earnings.

The tax is figured on 92.35% of your net profit, not on all of it. Half of self-employment tax is deductible when you figure income tax.

Example

Say you are a freelancer whose total tax on the 2026 return was $10,000, with an AGI of $70,000. To be sure of avoiding a penalty in 2027, paying 100% of last year's tax is enough:

• $10,000 ÷ 4 = $2,500 on April 15, June 15 and September 15, 2027, and January 18, 2028.

If your 2027 income grows, you pay the rest with your return, but without an underpayment penalty. If it drops noticeably, you can lower the payments and aim for 90% of the current year's tax.

And here is how self-employment tax itself works out on a net profit of $60,000: $60,000 × 92.35% = $55,410; $55,410 × 15.3% ≈ $8,478. That is before income tax, which is why many self-employed people set aside 25–30% of their profit for taxes. We can work out your exact figure in a consultation.

How to pay estimated tax

The IRS asks taxpayers to pay online whenever possible. Options for 2026:

• IRS Individual Online Account — the main option: pay from a bank account with no fee, save the account for next time, and see your full payment history. Choose "Estimated tax" as the payment type, then the year;
• IRS Direct Pay — also from a bank account with no fee, but as a guest, without signing in;
• the IRS app — it replaced IRS2Go in September 2026; you can pay and review payments there, signing in with the same credentials as your online account;
• debit or credit card or a digital wallet — through IRS-approved processors, for a fee;
• check or money order by mail with a Form 1040-ES voucher — the IRS still accepts them, but the government is phasing out paper checks and mail takes longer to process. The postmark date counts as the payment date.

EFTPS is closing to individuals. Since October 2025, individuals can no longer enroll in EFTPS; the IRS is moving them to the online account. If you already pay through EFTPS you can continue for now, but it is better to set up payments in your online account ahead of time. EFTPS still works for business taxes such as payroll.

You can also pay more often, for example monthly. What matters is that the required amount is in by each due date. Keep the confirmations: on your Form 1040 all payments go on a separate line.

The estimated tax penalty

If you paid too little or too late, the IRS charges an underpayment penalty. In effect it is interest on the unpaid amount for each day it is late, at a rate the IRS resets every quarter. The penalty is figured separately for each due date, so a large payment at the end of the year does not undo a missed payment in the spring.

The penalty is calculated on Form 2210. If your income is uneven, for example most of it came in the fall, the annualized income installment method on that form lets you show there was nothing to pay on in the spring. That often reduces the penalty or removes it entirely.

State estimated taxes

Most states with an income tax have their own estimated payments, usually on the same dates as the federal ones. There are some differences:

• California splits the annual amount unevenly: 30% in April, 40% in June, 0% in September and 30% in January (Form 540-ES);
• New York, New Jersey, Illinois and other states follow the federal schedule but have their own forms and thresholds;
• Florida, Texas, Nevada, Washington and a few other states have no personal income tax, so only the federal payments apply.

What to do now

1. Check whether you had income without withholding in 2026: a payment on it is due by January 15, 2027.
2. Look up the total tax on last year's return and divide it by four. That is your baseline payment for 2027.
3. Open a separate account and set aside part of every client payment for taxes.
4. Keep track of income and expenses during the year: with bookkeeping in place, a quarterly payment takes minutes instead of an evening with bank statements.

If your income is growing and self-employment tax is getting noticeable, it is worth discussing an S-corp election, one of the legal ways to reduce it.