If you earn money from freelancing, consulting, 1099 work, creator income, online selling, gig work, or a side business, you may need to make quarterly estimated tax payments.
That surprises many people.
When you are an employee, taxes are usually withheld from your paycheck. When you are self-employed or earning income without enough withholding, no one may be automatically setting aside federal income tax, Social Security tax, or Medicare tax for you.
That is where estimated taxes come in.
The IRS Self-Employed Individuals Tax Center says that as a self-employed individual, you generally must file an annual income tax return and pay estimated taxes quarterly. The IRS estimated taxes page also explains that estimated tax is the method used to pay Social Security, Medicare, and income taxes when you do not have an employer withholding those taxes for you.
Start with our 2026 Quarterly Estimated Tax Calculator if you want a practical estimate.
Quick answer
Quarterly taxes are estimated tax payments made during the year. They are often needed when tax is not withheld from income or not enough tax is withheld.
Freelancers, 1099 workers, consultants, creators, gig workers, and side-business owners may need quarterly payments because their income may create both federal income tax and self-employment tax.
Estimated tax can also apply to interest, dividends, capital gains, rent, royalties, prizes, and other income that is not fully covered by withholding.
| Question | Short answer |
|---|---|
| Are quarterly taxes a separate tax? | No, they are estimated payments toward tax owed |
| Do freelancers often need them? | Yes, if withholding is not enough |
| Do quarterly payments include self-employment tax? | Yes, they may need to cover income tax and self-employment tax |
| What form is used? | Form 1040-ES for individuals |
| What if income is uneven? | The annualized income method may matter |
| Can W-2 withholding cover side income? | Sometimes |
| Can an LLC eliminate quarterly taxes? | No |
| Do states have separate estimated taxes? | Often yes |
What are quarterly taxes?
“Quarterly taxes” usually means quarterly estimated tax payments.
They are not a separate type of tax. They are payments made during the year toward the tax you expect to owe.
The IRS says Form 1040-ES is used to figure and pay estimated tax, and estimated tax is used to pay tax on income that is not subject to withholding, such as self-employment earnings, interest, dividends, rents, alimony, and other income.
For freelancers and side-business owners, estimated tax may cover federal income tax, self-employment tax, and additional taxes depending on the facts.
Why freelancers and side-business owners get surprised
A freelancer may receive $5,000 from a client and think: I made $5,000.
But tax planning asks different questions:
- How much of that is profit after business expenses?
- How much federal income tax will apply?
- Is self-employment tax owed?
- Is state income tax owed?
- Should estimated payments be made during the year?
- Is W-2 withholding from another job enough to cover it?
Self-employment tax is often the surprise. It generally covers Social Security and Medicare taxes for people who work for themselves. The IRS says the self-employment tax rate is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare.
Read our guide: Self-Employment Tax Explained.
Who may need to make quarterly estimated tax payments?
You may need to make estimated tax payments if you expect to owe tax and withholding will not be enough.
This can include people with freelance income, 1099 income, consulting income, creator income, gig work, online selling income, sole proprietor income, single-member LLC income with default federal tax treatment, interest, dividends, capital gains, rental income, royalties, or other income not covered by enough withholding.
The IRS estimated tax page says individuals, including sole proprietors, partners, and S corporation shareholders, generally use Form 1040-ES to figure estimated tax. Nonresident aliens use Form 1040-ES(NR).
The basic IRS threshold
In many cases, you may need to make estimated tax payments if both of these are true:
- You expect to owe at least $1,000 in tax for the year after subtracting withholding and refundable credits.
- You expect your withholding and refundable credits to be less than the smaller of 90% of your current-year tax or 100% of the tax shown on your prior-year return.
For higher-income taxpayers, the prior-year safe harbor may be 110% instead of 100%. The 2026 Form 1040-ES instructions say that if your prior-year adjusted gross income was more than $150,000, or more than $75,000 if married filing separately, use 110% of the prior-year tax instead of 100%.
This is the basic idea behind estimated tax safe harbor planning.
2026 quarterly estimated tax due dates
For tax year 2026, the federal estimated tax due dates are:
| Payment | Income period covered | Due date |
|---|---|---|
| First payment | January 1 to March 31, 2026 | April 15, 2026 |
| Second payment | April 1 to May 31, 2026 | June 15, 2026 |
| Third payment | June 1 to August 31, 2026 | September 15, 2026 |
| Fourth payment | September 1 to December 31, 2026 | January 15, 2027 |
Notice that the periods are not four equal calendar quarters. The second payment covers April and May. The fourth payment is due in January 2027, but it is still for tax year 2026.
Read our guide: 2026 Estimated Tax Due Dates.
Quarterly payments may need to include self-employment tax
For freelancers and side-business owners, quarterly estimated payments may need to cover both income tax and self-employment tax.
IRS Publication 505 explains that estimated tax is used to pay not only income tax but other taxes such as self-employment tax and alternative minimum tax.
That means the estimate should not simply be income multiplied by a tax bracket. You may need to estimate net business profit, federal income tax, self-employment tax, credits and deductions, withholding from other income, prior estimated payments, and state taxes separately.
Use the 2026 Quarterly Estimated Tax Calculator as a starting point.
Can W-2 withholding cover side-business tax?
Sometimes.
If you have a W-2 job and a side business, you may be able to increase paycheck withholding enough to cover tax from the side business. That can be useful because withholding is generally treated differently from estimated payments for penalty purposes. But the right answer depends on your full tax situation.
Consider W-2 wages, current federal withholding, side-business net profit, self-employment tax, spouse income if filing jointly, credits and deductions, state taxes, and timing of income. Do not assume your W-2 withholding is enough. Use the 2026 Federal Income Tax Calculator and review during the year.
What if your income is uneven?
Freelancers and side-business owners often have uneven income.
You might earn very little in January and February, then receive a large project payment in June. Or you may have seasonal sales, launch income, a large affiliate payment, a big capital gain, or a late-year bonus.
If income is uneven, paying four equal estimated payments may not match reality.
IRS Publication 505 explains the annualized income installment method. That method annualizes your tax at the end of each period based on a reasonable estimate of income, deductions, and other items from the beginning of the year through the end of the period. The IRS says taxpayers using the annualized income installment method must file Form 2210 with the tax return.
Do not use annualized estimated tax casually. It can be helpful, but it requires better records and more careful calculation.
How to estimate quarterly taxes
A practical estimate usually starts with:
- Estimate gross business income.
- Subtract ordinary and necessary business expenses.
- Estimate net business profit.
- Estimate self-employment tax.
- Estimate federal income tax.
- Subtract expected withholding and credits.
- Subtract prior estimated payments.
- Divide or allocate the remaining amount by payment period.
- Adjust during the year if income changes.
The IRS estimated tax page says that to figure estimated tax, you must figure expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. It also says using the prior year’s return as a starting point may be helpful.
How to pay quarterly taxes online
Many taxpayers pay estimated taxes online.
Common federal payment paths include IRS Direct Pay from a bank account, IRS Online Account, debit card, credit card, or digital wallet through approved processors, or check or money order with a Form 1040-ES voucher.
IRS Direct Pay is for bank-account payments, not card payments. Debit card, credit card, and digital wallet payments use IRS-approved processors. If you use Direct Pay, make sure the payment type and tax year are correct. For a 2026 estimated tax payment, the payment should generally be applied to tax year 2026, even for the January 2027 installment.
Use these guides:
- How to Pay 2026 Estimated Taxes Online
- What Payment Type Should I Choose in IRS Direct Pay?
- IRS Direct Pay Mistakes to Avoid
- IRS Payment and Tax Bill Help Center
What happens if you do not pay enough?
If you do not pay enough tax through withholding and estimated payments, you may owe an underpayment penalty.
IRS Publication 505 explains that you may owe a penalty if you did not pay enough tax during the year, either through withholding or estimated payments, and it also discusses exceptions and penalty rules.
A key practical point: a refund at filing time does not always mean each estimated tax period was handled correctly. The IRS can look at whether payments were made sufficiently and timely during the year.
If you end up with a tax bill you cannot pay immediately, see How to Pay an IRS Tax Bill If You Cannot Pay in Full.
Do not forget state estimated taxes
This article focuses on federal estimated tax.
Your state may also require estimated tax payments. State due dates, forms, payment systems, penalties, and rules may differ from federal rules.
This matters especially if you live in a high-tax state, moved during the year, work across state lines, or earn self-employment income.
Does an LLC change quarterly tax obligations?
Not automatically.
An LLC does not eliminate estimated tax obligations.
If a single-member LLC is treated as disregarded for federal income tax purposes, the owner may still report business income and expenses on the owner’s personal return and may still need to pay estimated tax.
The LLC may help with business organization, banking, liability separation, contracts, and records. But it does not automatically remove income tax, self-employment tax, or estimated payment obligations.
Read: Do I Need an LLC for My Side Business?.
Do you need an EIN to pay quarterly taxes?
Not necessarily.
Individuals generally use their personal taxpayer identification number when making individual estimated tax payments. An EIN may be relevant for an LLC, business bank account, payroll, platform setup, or entity reporting, but an EIN is not automatically required just because you have side income.
Read: Do I Need an EIN for My Side Business?.
Non-U.S. creators and quarterly taxes
This article mainly focuses on U.S. taxpayers with freelance or side-business income.
Non-U.S. creators, freelancers, and online sellers may have different issues. A U.S. platform does not automatically make all income U.S.-source income, and nonresident aliens may have different sourcing, withholding, treaty, ITIN, EIN, W-8 form, and refund questions.
Use our U.S. Tax Setup for Non-U.S. Creators guide for that topic.
Common mistakes
Mistake 1 | Thinking quarterly taxes are only for full-time freelancers
Side-business income may also create estimated tax issues.
Mistake 2 | Forgetting self-employment tax
Quarterly estimated payments may need to cover both income tax and self-employment tax.
Mistake 3 | Using gross income instead of net profit
Business expenses matter, but only legitimate business expenses count.
Mistake 4 | Waiting until tax season
Estimated tax is a pay-as-you-go system. Waiting until filing season may create penalties or a large bill.
Mistake 5 | Choosing the wrong tax year in IRS Direct Pay
The January 2027 installment for 2026 estimated taxes should generally be applied to tax year 2026.
Mistake 6 | Forgetting state estimated taxes
Federal payment does not cover state tax.
Mistake 7 | Ignoring uneven income
If income is seasonal or irregular, the annualized income method may be relevant.
Mistake 8 | Assuming an LLC fixes quarterly taxes
It does not.
Practical examples
Example 1 | W-2 employee with $8,000 side income
A W-2 employee earns $8,000 from a side business and has $1,500 of business expenses. Net profit is $6,500. That profit may create both income tax and self-employment tax. The person may be able to increase W-2 withholding or make estimated payments.
Example 2 | Freelancer with $30,000 net profit
A freelancer has $30,000 of net self-employment income. If no tax is withheld, the freelancer may need quarterly estimated payments that cover both income tax and self-employment tax.
Example 3 | Creator has uneven income
A creator earns very little early in the year but receives a large platform payout in September. Four equal estimated payments may not match the timing of income. The annualized income method may be worth reviewing, but it requires careful records.
Example 4 | Single-member LLC owner
A person forms a single-member LLC but keeps default federal tax treatment. The LLC may help with banking and organization, but the owner may still need to make estimated tax payments if withholding is not enough.
Bottom line
Quarterly taxes are not a separate tax. They are estimated payments toward the tax you expect to owe.
For freelancers, creators, consultants, 1099 workers, gig workers, online sellers, and side-business owners, quarterly payments may need to cover both federal income tax and self-employment tax.
The best approach is to estimate early, keep good records, understand the due dates, and pay using the correct tax year and payment type.
Use our 2026 Quarterly Estimated Tax Calculator to start, then review official IRS Form 1040-ES and IRS Publication 505 guidance before making final decisions.
FAQ
What are quarterly taxes?
Quarterly taxes usually means quarterly estimated tax payments. They are payments made during the year toward tax you expect to owe, not a separate type of tax.
Do freelancers have to pay quarterly taxes?
Freelancers may need to pay quarterly estimated taxes if tax is not withheld or not enough tax is withheld. The IRS says self-employed individuals generally file an annual return and pay estimated taxes quarterly.
Do quarterly taxes include self-employment tax?
Yes. Estimated tax payments may need to cover both income tax and self-employment tax.
What form do individuals use for estimated taxes?
Individuals, including sole proprietors, partners, and S corporation shareholders, generally use Form 1040-ES to figure estimated tax. Nonresident aliens use Form 1040-ES(NR).
What are the 2026 quarterly estimated tax due dates?
For tax year 2026, the federal estimated tax due dates are April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027.
Why is the fourth 2026 estimated tax payment due in 2027?
The fourth payment for tax year 2026 is due January 15, 2027 because it covers the final income period of 2026. It should still generally be applied to tax year 2026.
Can W-2 withholding cover freelance or side-business taxes?
Sometimes. If you have a W-2 job, increasing paycheck withholding may help cover tax from side income. Whether that is enough depends on your full tax situation.
What if my freelance income is uneven?
If income is uneven, the annualized income installment method may be relevant. IRS Publication 505 explains this method, and taxpayers using it generally must file Form 2210 with the tax return.
What happens if I do not pay enough estimated tax?
You may owe an underpayment penalty if you do not pay enough tax during the year through withholding or estimated payments.
Does an LLC eliminate quarterly taxes?
No. An LLC does not automatically eliminate estimated tax obligations, income tax, or self-employment tax.
Do I need an EIN to make quarterly estimated tax payments?
Not necessarily. Individuals generally make personal estimated tax payments using their individual taxpayer identification number. An EIN may be relevant for business or entity setup, but it is not automatically required just because you have side income.
Do states require quarterly estimated tax payments?
Many states have estimated tax rules, but state rules, forms, payment systems, and penalties may differ from federal rules.
Are quarterly taxes based on gross income or profit?
For self-employment income, the estimate generally starts with net profit after legitimate business expenses, not gross receipts. The full estimated tax calculation also considers deductions, credits, withholding, and other income.
Are quarterly taxes the same as self-employment tax?
No. Quarterly estimated payments are payments made during the year. Self-employment tax is a tax for Social Security and Medicare. Quarterly payments may be used to pay self-employment tax.
Official IRS sources
- IRS | Estimated Taxes
- IRS | Self-Employed Individuals Tax Center
- IRS | About Form 1040-ES
- IRS | 2026 Form 1040-ES
- IRS | Publication 505
- IRS | Self-Employment Tax
- IRS | Topic No. 554, Self-Employment Tax
- IRS | Estimated Tax FAQ
- IRS | Direct Pay
- IRS | Pay Your Taxes by Debit or Credit Card or Digital Wallet
This article is for general informational purposes only and is not tax, legal, accounting, business formation, payroll, international tax, or financial advice. Estimated tax requirements depend on income type, withholding, credits, deductions, filing status, tax year, self-employment income, state tax rules, timing of income, and other facts. The examples are simplified and are not final tax calculations. Review official IRS guidance and consider speaking with a qualified tax professional before making tax decisions.