Quarterly Estimated Tax Payments — Complete Guide for 2026
If you earn income that isn't subject to withholding — freelance work, rental income, investment gains, side hustles — you're probably required to make quarterly estimated tax payments to the IRS. The threshold is straightforward: if you expect to owe $1,000 or more in federal taxes after subtracting withholding and credits, you need to pay quarterly.
Calculate your quarterly payment amount with the Quarterly Tax Calculator.
Who Needs to Pay Quarterly Taxes?
| Income Source | Quarterly Payments Needed? |
|---|---|
| Freelance / self-employment income | Yes — if net earnings exceed ~$400 |
| Rental income | Yes — if not covered by W-2 withholding |
| Investment income (dividends, capital gains) | Usually — unless withholding covers it |
| Side hustle income (1099 work) | Yes |
| W-2 salary only | Usually no — withholding covers it |
| W-2 salary + small side income | Maybe — depends on whether withholding covers the total |
| Retirement distributions (no withholding elected) | Yes |
The $1,000 threshold applies to your total federal tax liability minus withholding and credits. If you have a W-2 job with adequate withholding and a small side income, your withholding might already cover the extra tax — meaning no quarterly payments needed.
The Four Payment Deadlines
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | January 1 – March 31 | April 15, 2026 |
| Q2 | April 1 – May 31 | June 15, 2026 |
| Q3 | June 1 – August 31 | September 15, 2026 |
| Q4 | September 1 – December 31 | January 15, 2027 |
Notice the quarters aren't equal: Q2 covers only two months, Q3 covers three months, and Q4's payment isn't due until mid-January of the following year. If you file your annual return and pay the balance by January 31, you can skip the Q4 payment.
How to Calculate Your Quarterly Payment
Two main methods:
Method 1: Current-Year Estimate
Estimate your total 2026 tax liability, subtract expected withholding and credits, and divide by 4.
| Line | Amount |
|---|---|
| Expected 2026 total income | $85,000 |
| Estimated federal tax | $13,200 |
| Self-employment tax (15.3% on 92.35%) | $4,800 |
| Total tax liability | $18,000 |
| Minus: W-2 withholding | -$8,000 |
| Minus: Credits | -$0 |
| Amount owed through estimated payments | $10,000 |
| Quarterly payment | $2,500 |
Method 2: Prior-Year Safe Harbor
Pay 100% of your prior year's tax liability (110% if AGI exceeded $150,000), divided by 4. This guarantees you avoid underpayment penalties regardless of how much you actually owe.
What Happens If You Don't Pay
The IRS charges an underpayment penalty calculated as interest on the unpaid amount for the period it was unpaid. The current rate is approximately 8% annually, applied quarterly. So if you skip all four quarters on a $10,000 liability, the penalty is roughly $400–$600.
It's not a criminal issue and it's not a huge penalty — but it is avoidable.
For the exact 2026 due dates and reminders, see When Are Quarterly Taxes Due? 2026 Deadlines. For penalty specifics, read Estimated Tax Penalty — How to Avoid It. And for freelancer-specific guidance, check Quarterly Taxes for Freelancers.
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