Quarterly estimated tax calculator

Why the year is split into four unequal pieces

The US tax system is pay-as-you-go. An employee satisfies that through withholding without ever thinking about it. Anyone with income nobody withholds against — self-employment, investments, rent, a pension without withholding — has to make the payments themselves, four times a year.

The dates are 15 April, 15 June, 15 September, and 15 January of the following year, moving to the next business day when one falls on a weekend or holiday. They are not evenly spaced: the second is two months after the first, not three, and it is the deadline people miss most often.

Each payment covers a specific period rather than a quarter of the year. The April payment covers January to March, the June payment April and May, September June to August, and January September to December. That asymmetry is why "I paid a quarter of my tax in each of four payments" is not always enough.

On $90,000 of self-employment profit the annual liability is $19,316, so a simple split is $4,829 a quarter. The safe harbour usually allows less — $3,000 in this example, because the calculation turns on last year's tax rather than this year's.

Nobody is required to pay evenly, either. If your income is seasonal, the annualised income instalment method lets you pay in proportion to when you actually earned it — more paperwork, and genuinely useful for a business that makes most of its money in one quarter.

The safe harbour, which is what actually protects you

You are not required to predict your income correctly. The safe harbour of § 6654 says no penalty applies if you paid at least 90% of this year's tax, or 100% of last year's — rising to 110.00000000000001% if the prior year's AGI exceeded $150,000.

Whichever is lower is what you have to pay, and the prior-year path is usually the lower one for anyone whose income is rising. It is also the only one you can compute with certainty in April, because last year's number is a fact and this year's is a forecast.

The consequence is liberating and widely unknown: in a year when your income doubles, you can pay based on last year's much smaller tax, settle the rest in April, and owe no penalty at all. The tax is still due; the penalty is not. For a business having an unexpectedly good year, that is a cash-flow difference of thousands.

The penalty when you fall outside it is not a flat fine. It is computed quarter by quarter at a statutory interest rate on the amount that was short, for the days it was short — which is why paying nothing until December and then everything at once still generates a penalty for the earlier quarters.

And withholding rescues almost everything. Tax withheld from a salary or a pension is treated as paid evenly across the year regardless of when it happened, so an underpayment discovered in November can be fixed by increasing a W-4 — and the whole amount counts as though it had been paid since January. An estimated payment in November does not get that treatment.

Paying, and keeping the record

Payment is made directly to the IRS, most simply through its own electronic systems: Direct Pay from a bank account, or EFTPS, which requires enrolment in advance and is worth doing before you need it rather than the week a payment is due.

Nobody sends you a bill or a reminder. There is no statement, no notification and no confirmation that you have paid the right amount — the entire mechanism is self-directed, which is why it is the single most commonly missed obligation for people new to self-employment.

Keep your own record of what was paid and when, because you will need it at filing and nobody else is tracking it for you. The IRS online account shows payments received, and reconciling against it once a year takes ten minutes and catches the payment that was made to the wrong tax year — which is a surprisingly common error and a slow one to unwind.

States run their own parallel system with their own dates, which usually but not always match the federal ones. A state that requires estimated payments and receives none applies its own penalty, and the fact that you paid the IRS correctly is no defence.

The system that makes this boring: a separate account, a fixed percentage moved into it as each payment arrives, and the four dates in your calendar with a reminder a week before each. At $90,000 of profit roughly 21.46% covers federal, plus your state's rate on top.

Four ways estimated payments go wrong

Assuming the deadlines are evenly spaced. The second is 15 June, two months after the first. It is the most commonly missed of the four, and by the time you notice, the interest has been accruing for weeks.

Paying a quarter of last year's tax without checking the threshold. The prior-year safe harbour is 100% of last year, but 110.00000000000001% if last year's AGI exceeded $150,000. Paying 100% when 110% was required leaves you outside the harbour on the whole amount.

Catching up in December. The penalty is computed per quarter. A single large payment at the end of the year does not undo the earlier shortfalls — but increasing withholding on a salary does, because withholding is deemed paid evenly across the year.

Forgetting the state entirely. Most states with an income tax require their own estimated payments on their own schedule, and apply their own penalty. Federal compliance is no defence against a state that received nothing.

Who owes estimated payments besides the self-employed

Anyone with meaningful income that nothing withholds against. Self-employment is the obvious case, but it is far from the only one, and the others catch people who have never thought of themselves as needing to make tax payments.

Investment income is the largest group. Dividends, interest and realised capital gains carry no withholding at all, so a year with a substantial sale can create an obligation for someone whose only other income is a fully withheld salary. Brokerages do not withhold and do not warn you.

Rental income is another, and it arrives monthly in a way that makes it feel like wages while behaving nothing like them. A retiree drawing from an IRA is a third — withholding on distributions is elective, and electing zero is easy to do once and forget.

Then the mixed cases: a salaried person with a profitable side business, a household where one spouse is employed and the other is not, someone who exercised stock options, and anyone who received a large one-off payment with inadequate withholding.

For all of these, the alternative to estimated payments is usually better: increase withholding on whatever employment or pension income exists. It is one form, it is treated as paid evenly across the year, and it removes four deadlines from your calendar permanently.

The state schedule that does not always match

Most states with an income tax operate their own estimated payment system, with their own thresholds for when payments are required, their own safe harbour percentages, and their own penalty. Compliance with one says nothing about the other.

The due dates usually mirror the federal ones but not always, and a handful of states have consolidated or shifted instalments in recent years. A calendar built on the federal dates alone will be right in most states and wrong in some, which is the worst kind of assumption.

Safe harbours differ too. Some states mirror the federal 100%-of-prior-year rule, some use a different percentage, and some have no prior-year option at all — which removes the certainty that makes the federal rule usable and forces an actual forecast.

The thresholds for being required to pay at all also vary, and are often low. A state that requires estimated payments once you expect to owe a few hundred dollars catches people whose federal position is comfortably inside the safe harbour.

And then the local layer in the eleven states that permit municipal income tax. Several require their own estimated payments and their own return, separate from both the state and the federal ones — Ohio municipalities most notably, where a resident working elsewhere may be filing in two municipalities plus the state plus the IRS.

Making the payments survivable

The reason estimated payments go wrong is almost never ignorance of the rule. It is that the money has been spent by the time the date arrives, because income that arrives untaxed feels entirely like yours in a way that a payslip never does.

The fix is mechanical rather than disciplined: a second account, and a standing rule that a fixed percentage of every payment received moves into it the day it arrives. Not at month end, not at quarter end — on receipt, before the balance has been mentally allocated to anything.

The percentage should cover federal, state and local combined, and it is better to overshoot. Somebody who sets aside 35% and needed 28% has an unexpectedly good January; somebody who set aside 20% and needed 28% has a problem that compounds through the following year.

Rising income is the specific trap, because the prior-year safe harbour makes the payments comfortable while the actual liability grows underneath them. Paying $12,000 across a year on the prior-year rule while owing $20,000 is entirely legitimate and entirely penalty-free — and it leaves $8,000 due in April that the safe harbour never asked for.

So track both numbers: what the safe harbour requires, which keeps you out of penalty, and what you actually expect to owe, which is what needs to exist in the account by April. They are not the same figure, and confusing them is how a compliant taxpayer ends up unable to pay.

When your income is seasonal, pay in proportion to it

The default assumption is that income arrives evenly, so each instalment is a quarter of the year's requirement. For a business that earns most of its money in one season, that forces payments in months when nothing has come in.

The annualised income instalment method solves it. Instead of four equal payments, each instalment is computed on the income actually earned by that point in the year, annualised. A business earning nothing until August pays little in April and June and more in September and January.

The cost is paperwork: a schedule filed with the return showing income and deductions by period, which requires books kept well enough to split the year accurately. For a business already keeping monthly accounts it is straightforward; for one reconstructing the year in March it is not.

It also protects against a specific unfairness. A large one-off event late in the year — a property sale, a big contract, an option exercise — creates liability in the quarter it happened, and the default method can produce a penalty for the earlier quarters when nothing had yet occurred. The annualised method removes that.

It is elected on the return rather than in advance, so you can decide after the year has ended which method produces the better result. There is no need to commit in April to how you will compute it.

What happens if you pay too much

Overpaying carries no penalty and no risk beyond the cost of not having the money. The excess is refunded when you file, or can be applied to the following year's first instalment, which is often the more useful choice for someone whose income is stable.

Applying it forward has an advantage worth knowing: an overpayment credited to next year is treated as paid on the first instalment date, which for someone whose income is rising makes the first quarter of the following year effortless.

Interest is not paid on estimated tax overpayments held during the year, only on refunds delayed beyond a period after filing. So a large deliberate overpayment is an interest-free loan in the same way an over-withheld salary is, and the same reasoning applies to whether that is worth it.

The asymmetry of risk is what argues for erring high. Overpaying costs a little foregone interest on a temporary balance; underpaying costs a penalty computed as interest on the shortfall plus, more importantly, an April bill that may not be affordable.

For a first year of self-employment in particular, setting aside more than the calculation suggests is the right call. The first year has the least reliable forecast, no prior-year figure that reflects the new situation, and the least experience of how the numbers behave.

Where the estimated payment figures come from

Everything computed here rests on IRC § 6654, IRC § 1401, read off the law and the IRS revenue procedure rather than off a summary of either. Where a figure is indexed to inflation it comes from Rev. Proc. 2025-32, the same document that sets the brackets used across this site.

The indexed figures on this page are the self-employment tax wage base, the federal brackets used to project the annual liability — all published for 2026 and all checked on 2 September 2026. Each carries that date because a tax figure without one is unverifiable, and the commonest error in this category is a correct figure from the wrong year.

The safe harbour percentages and the $150,000 prior-year AGI threshold are statutory and are not indexed at all. Thresholds that are not indexed are the ones compiled sources most often present as though they were current when they have simply never moved — which is a different kind of staleness and harder to spot.

What this page does not model is stated in full under the calculator rather than buried here: it projects a liability from self-employment profit and does not model the annualised income instalment method, state or local estimated payments, or a farming or fishing income exception. Where a case falls outside what the engine handles, we would rather say so than return a confident number for a situation we did not compute.

The arithmetic itself is deterministic — rates in, result out, with no model deciding anything. The AI explanation available on this site describes figures it was given and never produces one, which is the only arrangement in which a language model belongs anywhere near a tax calculation.

Questions

When are estimated tax payments due?

15 April, 15 June, 15 September, and 15 January of the following year, shifting to the next business day when one falls on a weekend or holiday. They are not evenly spaced — the second is two months after the first, which is the one most people miss.

How much should I pay each quarter?

Enough to reach the safe harbour: the lower of 90% of this year's tax or 100% of last year's (110.00000000000001% if last year's AGI was above $150,000), divided by four, less anything already withheld elsewhere. On $90,000 of self-employment profit the full-year liability is about $19,316.

What happens if I miss a payment?

A penalty computed as interest on the shortfall, for the days it was short, quarter by quarter. It is not a flat fine and it is not enormous — but it accrues from the missed date, so paying late is better than not paying, and paying the next instalment early does not cure the previous one.

Can I skip quarterly payments and pay it all in April?

Only if you stay inside the safe harbour some other way, usually through withholding on a salary. Otherwise the penalty applies to each quarter that was short, regardless of the April payment. If you have any withheld income, increasing it is the most effective fix because withholding counts as paid evenly across the year.

Do I need to pay estimated tax in my first year of self-employment?

Often less than you would think. The prior-year safe harbour is computed on last year's total tax, so someone who was employed all of last year can pay that amount across this year and settle the rest in April without penalty. The tax is still owed — the penalty is not.

Do states require estimated payments too?

Most states with an income tax do, on their own schedule and with their own penalty. The dates usually match the federal ones but not always, and paying the IRS correctly is no defence against a state that received nothing. Check your own state's rules alongside the federal ones.