Quarterly Tax Payments Explained for Self-Employed Workers and Business Owners
- Jul 24
- 6 min read
Updated: Jul 27
Key Takeaways
Quarterly tax payments help self-employed individuals and business owners pay taxes throughout the year instead of facing one large tax bill at filing time.
You may need to make quarterly estimated tax payments if you expect to owe at least $1,000 in taxes after withholding and credits.
Estimated tax payments typically cover income tax and self-employment tax.
Missing payment deadlines can result in an underpayment penalty and interest charges.
Quarterly taxes are generally due in April, June, September, and January.
The IRS provides several convenient payment options, including the Electronic Federal Tax Payment System (EFTPS).
If you're self-employed, freelancing, or running a small business in Cartersville or the surrounding Bartow County area, the IRS doesn't wait until April to collect—it expects you to pay as you earn through quarterly estimated taxes. For anyone new to working outside a traditional W-2 job, understanding when and how much to pay can feel like a moving target.
Whether you’re a freelancer, small business owner, S-corp shareholder, partner, or earning income from investments or rental properties, understanding your quarterly tax obligations is an important part of avoiding surprises at tax time. Here’s a plain-English guide to who owes quarterly taxes, how payments work, and how to stay on track throughout the year.
What Are Quarterly Estimated Tax Payments?
Quarterly estimated tax payments are advance payments made to the IRS throughout the year based on your expected taxable income, as your income is earned. If sufficient taxes are not withheld from your income, you may be required to make these quarterly estimated tax payments.
They help cover your anticipated federal income tax and, for self-employed individuals, self-employment tax. That way, instead of paying your entire tax liability when you file your return (which can tally up to a staggering amount), estimated payments spread that obligation across four payment periods.
Who Needs to Pay Quarterly Taxes?
Several types of taxpayers may need to make quarterly estimated tax payments.
Self-Employed Individuals
Self-employed people—like freelancers, independent contractors, consultants, gig workers, and sole proprietors—often need to pay quarterly taxes because taxes are not automatically withheld from their earnings.
If you receive income reported on Form 1099 and expect to owe taxes, estimated payments are typically required.
Small Business Owners and LLC Members
Many small business owners must also pay quarterly taxes, especially if they operate as sole proprietorships, partnerships, or single-member LLCs.
Partners and S-corp shareholders may also need to make estimated payments if enough tax is not being withheld elsewhere.
People With Side Income
People earning income outside their regular employment may need to pay quarterly taxes.
Examples include:
Freelance work
Consulting services
Contract work
Side businesses
Gig economy earnings
Even if you have a full-time job, side income can create additional tax obligations.
Individuals With Investment or Passive Income
Income from investments and passive sources is often not subject to withholding.
Examples include:
Interest income
Dividends
Capital gains
Rental income
Royalties
If these earnings significantly increase your tax liability, estimated payments may be necessary.
W-2 Employees Who Are Under-Withholding
Even traditional employees sometimes need to make quarterly payments, in the case that they’re under-withholding from their paychecks.
If your paycheck withholding is not sufficient to cover your total tax liability, you may owe estimated taxes. This can occur when taxpayers have multiple jobs, significant investment income, or a lot of side income.
Who Doesn't Need to Pay Quarterly Taxes?
You generally do not need to make quarterly tax payments if:
You expect to owe less than $1,000 after subtracting withholding and tax credits.
Your withholding already covers your tax liability.
You had no tax liability in the previous year, were a U.S. citizen or resident for the entire year, and your prior tax year covered 12 months.
If you're unsure whether quarterly taxes apply to your situation, it’s a good idea to consult a tax professional and prevent costly mistakes.
Benefits of Paying Taxes Quarterly
Making quarterly estimated tax payments may seem frustrating at first—after all, most people only have to pay once a year! However, there are several benefits, including:
Avoiding a large tax bill when you file your annual return
Improving cash flow management by spreading out payments
Avoiding IRS penalties and interest charges for underpayment
Better visibility into finances for more informed decisions about spending, investments, and growth opportunities
What Taxes Do Self-Employed Individuals and Small Business Owners Have to Pay?
Self-employed taxpayers are generally responsible for both income tax and self-employment tax.
Income Tax - Federal income tax is based on your taxable income after deductions and credits are applied.
Self-Employment Tax - Self-employment tax covers Social Security and Medicare taxes that would normally be shared between an employer and employee. Self-employed individuals are responsible for both portions.
Depending on your state and local requirements, additional taxes may also apply.
What Is the Qualified Business Income Deduction?
The Qualified Business Income (QBI) Deduction is a deduction that allows many eligible business owners to deduct up to 20% of their qualified business income.
This deduction may be available to:
Sole proprietors
Partnerships
S-corp shareholders
Certain LLC owners
The QBI deduction can reduce taxable income and lower overall tax liability, so it’s an important consideration in your quarterly estimated tax calculations.
Eligibility can be complex, particularly for higher-income taxpayers and specified service businesses, so consulting a professional is a smart move in this case.
When Are Quarterly Taxes Due in 2026?
For most taxpayers, the estimated tax deadlines for the 2026 tax year are:
Payment Period | Due Date |
January 1 – March 31 | April 15, 2026 |
April 1 – May 31 | June 15, 2026 |
June 1 – August 31 | September 15, 2026 |
September 1 – December 31 | January 15, 2027 |
If a due date falls on a weekend or federal holiday, the deadline may be adjusted to the next business day.
Mark these dates on your calendar to help ensure you never miss a payment!
How to Pay Quarterly Taxes
The IRS offers several ways to pay estimated taxes.
Common payment methods include:
Electronic Federal Tax Payment System (EFTPS) - The Electronic Federal Tax Payment System (EFTPS) allows taxpayers to schedule and manage payments online.
IRS Direct Pay - Direct Pay enables taxpayers to pay directly from a checking or savings account.
Debit Card or Credit Card - The IRS accepts payments through approved payment processors, although processing fees may apply.
Mail a Payment - Taxpayers can also mail a payment voucher from Form 1040-ES along with a check or money order.
Regardless of your payment method, it’s important to keep detailed records of all quarterly estimated tax payments throughout the year.
What Happens if You Miss a Quarterly Tax Payment?
Missing a quarterly payment can result in an underpayment penalty, even if you ultimately receive a refund when filing your annual return.
The IRS generally expects taxpayers to pay taxes as income is earned. If you fail to make adequate payments, interest and penalties may accumulate.
To avoid penalties, you might meet one of the following IRS safe harbor rules:
Pay at least 90% of your current year tax liability, or
Pay 100% of last year's tax liability.
For higher-income taxpayers with adjusted gross income above IRS thresholds, the safe harbor may increase to 110% of the previous year's tax liability.
If you miss a payment, making it as soon as possible may help minimize additional charges.
Common Mistakes When Filing Quarterly Taxes
Several common errors can create tax problems for business owners and self-employed individuals.
Underestimating Income - Many taxpayers fail to account for all sources of income, resulting in insufficient payments.
Forgetting Self-Employment Tax - Some business owners calculate income tax but overlook self-employment tax.
Missing Deadlines - Missing estimated tax deadlines can trigger penalties and interest.
Failing to Adjust Payments - Income often changes throughout the year. Reviewing earnings regularly can help ensure payments remain accurate.
Poor Recordkeeping - Maintaining organized financial records through consistent bookkeeping practices makes estimating quarterly taxes significantly easier and more accurate.
Resources to Help With Quarterly Taxes
Managing quarterly taxes doesn't have to be overwhelming. Helpful resources include:
The Bottom Line
Estimating quarterly taxes correctly is part math, part judgment — and getting it wrong means penalties.
The Hubbard Accounting Firm helps self-employed professionals, small business owners, and individuals across Bartow, Cherokee, Cobb, and Paulding counties understand their quarterly tax obligations, calculate estimated payments, and develop proactive tax strategies.
Whether you’re navigating self-employment income, an S-corporation, partnership taxes, rental income, or other complex tax situations, our team can help you make informed decisions and avoid surprises at filing time.
Schedule a free consultation or call (706) 936-6231 to discuss your tax planning needs.
Written by Kyle Hubbard, CPA, managing partner of The Hubbard Accounting Firm. Kyle brings Big Four public accounting experience (PwC, EY, and KPMG) to small businesses, individuals, and community associations across Bartow, Cherokee, Cobb, and Paulding counties — big-firm expertise with small-town heart.
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