Key takeaways
If you’re self-employed, you usually need to pay estimated quarterly taxes instead of waiting until April.
Quarterly tax payments are based on what you earn and deduct during the year, which means the amount can change from quarter to quarter.
Missing or underpaying a quarter isn’t the end of the world, but ignoring quarterly taxes can lead to penalties or a bigger bill later.
The first time someone asked me how I was handling quarterly taxes, I realized I had a problem. I thought taxes were a once-a-year thing — not something I needed to think about four times a year.
That’s when I realized freelancing comes with a tax learning curve I hadn’t planned for.
Why the IRS wants money from you four times a year
When you had a W-2 job, your employer quietly sent tax money to the IRS every payday. You never saw it, it just disappeared from your paycheck.
As a freelancer or small business owner, you are now the employer. No one is automatically withholding taxes for you, so the IRS asks you to make estimated tax payments during the year instead of waiting until April. This is what is known as “pay as you go,” and most states have the same expectations.
So what this means is:
• You pay taxes in chunks (usually four times a year)
• Each payment covers the tax on money you’ve earned in the previous quarter
• The goal is to avoid a big surprise tax bill at year-end and penalties for not paying as you go
Consider this a healthy way to view your tax responsibilities. It’s not extra taxes you have to pay, but rather smaller chunks you pay over time instead of a big bill that might take you out.
The big three questions: When, how much, and what if you miss one?
1. When are quarterly taxes due?
For most self-employed people, estimated payments are due four times a year, roughly:
• Mid-April (for income earned Jan–Mar)
• Mid-June (for income earned Apr–May)
• Mid-September (for income earned Jun–Aug)
• Mid-January of the following year (for income earned Sep–Dec)
The exact dates may change slightly each year, but they cluster around those months. Schedule this on your calendar as your quarterly check-in with the IRS.
2. How much are you supposed to pay?
This is the part that makes most people want to slam their laptop shut. You’re trying to hit a moving target:
• You estimate how much you’ll earn this year
• You estimate what your tax might be on that amount
• You divide that into four payments
As far as your income in reality, some months are great, some are slow, and guessing feels risky. That’s why using a calculator built for self-employed people can be such a relief.
3. What happens if you miss or underpay?
If you underpay during the year, you might:
• Owe more than you expected at tax time
• Get hit with underpayment penalties (basically, interest and fees for paying your estimates late)
But missing one payment doesn’t mean you’re doomed. You can:
• Catch up on the next payment
• Adjust what you pay as your income changes
• Use software that helps you aim for the “safe harbor” amounts that keep you out of penalty territory
The key is to start doing something rather than avoiding it altogether.
How to make your quarterly taxes less painful
Skim off a percentage of every payment you get.
Many freelancers set aside a rough 25–30% of each invoice in a separate “tax” savings bucket. That way, when a quarterly deadline pops up, you’re not scrambling. You’ve already set aside this money.
Use a tool that does the math for you
Instead of guessing how much to pay each quarter, you can use a self-employed tax calculator to get a real estimate based on your actual numbers, not vibes. Your estimated tax will be calculated based on your net quarterly income, after expenses.
Treat it like a bill, not a surprise
Put quarterly dates in your calendar. When the reminder hits, you move money from your tax bucket, make the payment, and get on with your work.
Your next step
If you want help making sure you’re not missing deductions or overlooking anything specific to your business, TurboTax Experts for Business understands self-employment and can make the process a lot easier to set you up for success.
