Quarterly estimated tax: Form 1040-ES, safe harbor & due dates
If you're a sole proprietor, freelancer, partner, S-corp owner, or W-2 employee with material outside income, the IRS expects you to pay tax on every dollar as you earn it — not in one lump at filing. Miss the safe harbor and the underpayment penalty kicks in at 8% APR on the shortfall.
Quarterly estimated tax calculator
Required annual payment (smaller of 90% this year or prior-year %)$15,000.00
Less withholding, still to pay$13,000.00
Each of four quarterly payments$3,250.00
An estimate, not tax advice. Rules: IRS estimated taxes, checked September 29, 2026.
Keep your expected-tax figure current: HelloBooks Free builds your P&L from a live bank feed, $0.
Start freeNo credit cardThe four due dates (2026 tax year)
| Quarter | Income period | Due date |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15, 2026 |
| Q2 | Apr 1 – May 31 | June 16, 2026 |
| Q3 | Jun 1 – Aug 31 | September 15, 2026 |
| Q4 | Sep 1 – Dec 31 | January 15, 2027 |
The quarters are not 3 months each. Q1 covers 3 months, Q2 covers 2 months (April–May), Q3 covers 3 months (June–August), Q4 covers 4 months (September–December). Don't compute payment by dividing-by-four if your income is uneven — use the annualized income installment method on Form 2210, Schedule AI to align the payment to actual income earned that quarter.
The three safe harbors — pick whichever is easier
| Test | Cumulative payment by year-end | When to use |
|---|---|---|
| Current-year test | ≥ 90% of this year's total tax | When this year's tax is much lower than last year's |
| 100% prior-year test | ≥ 100% of last year's total tax | AGI ≤ $150,000 ($75,000 MFS) |
| 110% prior-year test | ≥ 110% of last year's total tax | AGI > $150,000 ($75,000 MFS) |
Most owners use the prior-year test because the number is known and fixed. You can switch to the current-year test if a major life event (sale of business, marriage / divorce, retirement) makes this year's tax much lower.
Self-employment tax — the often-forgotten 15.3%
When you compute estimated tax as a sole prop or partnership owner, you owe self-employment tax in addition to income tax:
- Social Security portion — 12.4% on net self-employment income up to the wage base ($168,600 in 2024, indexed yearly).
- Medicare portion — 2.9% on all net self-employment income, no cap.
- Additional Medicare — 0.9% on net SE income above $200,000 ($250,000 MFJ).
- You can deduct half of the SE tax on Schedule 1 (above-the-line), which slightly reduces your AGI and therefore your income tax.
Forgetting SE tax is the most common estimated tax mistake — it can mean a 15% under-estimate.
Pay through one of these channels
- IRS Direct PayFree. Bank-account debit. No enrollment.
- EFTPSFree. Bank-account debit. Requires enrollment but batches federal + state.
- IRS2Go appMobile. Same as Direct Pay, on a phone.
- Credit / debit cardApproved processor; fee 1.85%–2.95%.
- Form 1040-ES voucherPrint + mail with a check. Slowest, no electronic record.
How HelloBooks does this
HelloBooks pulls year-to-date net profit and self-employment income from the books, applies the current-year brackets and safe-harbor rules, and fires a reminder 14 days before each due date with the payment number ready.
- 1
Confirm whether you owe estimated tax
Look at last year's Form 1040, Line 24 (total tax). If you don't have employer withholding that covers at least 90% of this year's expected number (or 100% / 110% of last year's), you owe estimated tax. HelloBooks runs this check from your prior-year return + current year-to-date P&L.
- 2
Pick the safe-harbor anchor
Default to 100% / 110% of last year — predictable, simple. Use 90% of current-year if you expect this year's tax to be much lower than last year's (sale of business, retirement). HelloBooks recommends the lower-cost anchor based on the year-to-date data.
- 3
Compute the per-quarter payment
HelloBooks pulls year-to-date net profit and self-employment income from the books, applies the current-year tax brackets, computes self-employment tax separately (15.3% / 2.9% / + 0.9% surtax), and divides the safe-harbor total by four. Review the working paper.
- 4
Pay through the IRS portal on each due date
Pay via EFTPS, Direct Pay, or mail the Form 1040-ES voucher. HelloBooks fires a reminder 14 days before each of the four due dates (April 15, June 16, September 15, January 15) and posts the payment to the books once confirmed.
- 5
True up at year-end
When you file Form 1040 in April, reconcile the four estimated payments against actual tax owed. If you overpaid, claim the refund or roll forward to next year's Q1 (Form 1040 Line 36). If you underpaid past the safe harbor, compute the penalty on Form 2210 (or let the IRS bill).
Frequently asked questions
Who has to pay quarterly estimated tax?
Anyone whose tax bill (after withholding and refundable credits) is expected to be $1,000 or more for the year, and whose income is not subject to enough employer withholding to cover it. That includes sole proprietors, independent contractors, freelancers, partners in a partnership, S-corp shareholders taking distributions, landlords with material rental income, and W-2 employees with significant outside income (capital gains, side gigs, dividends).
When are the four 2026 estimated tax payments due?
April 15, June 16, September 15, and January 15, 2027 (for 2026 income). The schedule is not evenly spaced — Q1 is 3 months, Q2 is 2 months, Q3 is 3 months, Q4 is 4 months. Each due date is for the income earned in the preceding period, not the full quarter. Weekend / holiday roll: when the 15th falls on a weekend or federal holiday, the due date moves to the next business day.
What is the safe-harbor rule?
Pay enough through estimated tax + withholding to avoid the underpayment penalty. You're safe if your cumulative payments meet ONE of three tests by year-end: (a) 90% of the current year's tax liability, (b) 100% of last year's tax liability if your AGI was ≤ $150,000 (≤ $75,000 MFS), or (c) 110% of last year's tax liability if your AGI was > $150,000 (> $75,000 MFS). The 100% / 110% safe harbor is easier to predict because it uses last year's known number.
How do I compute the payment?
Use the worksheet inside Form 1040-ES. Estimate this year's total income, subtract expected deductions, apply the tax rates from the current-year tax brackets, subtract expected credits, add self-employment tax (15.3% on net SE income up to the Social Security cap, 2.9% above + 0.9% additional Medicare for high earners), and divide by four. HelloBooks pre-fills the worksheet from your year-to-date P&L so you only need to confirm projections.
What is the underpayment penalty?
If your payments miss the safe harbor, the IRS charges interest on the underpayment from the date each installment was due. The rate is set quarterly (currently 8% annually as of late 2024). Compute on Form 2210 — if it's small you can let the IRS bill you instead of filing the form. Penalty for late filing of estimated tax is separate from the underpayment interest.
How do I pay?
Five options: (1) IRS Direct Pay from a bank account (free), (2) EFTPS (free, requires enrollment), (3) IRS2Go mobile app, (4) credit/debit card via approved processor (fee 1.85%–2.95%), or (5) mail a check with Form 1040-ES voucher to the appropriate IRS service center. Most SMBs use EFTPS once they're enrolled — it batches state and federal in one place.
Do S-corps and partnerships pay quarterly estimated tax?
The entity itself does not (pass-through). The shareholders / partners pay it personally based on their share of the pass-through income shown on the K-1 they receive. S-corp shareholder-employees who also take a W-2 salary can have extra federal income tax withheld from the W-2 to cover the K-1 income — that often eliminates the need for separate estimated tax payments. Talk to your CPA about the W-2 withholding strategy.
Do states have their own estimated tax payments?
Yes. Every state with personal income tax has its own quarterly estimated tax regime — California (FTB 540-ES), New York (IT-2105), and most others have due dates that mirror the federal schedule but with state-specific safe harbors. The penalty rules differ — California has the most aggressive underpayment rule (90% of current year only, no 100% / 110% prior-year option above $150k AGI).
More on US compliance
US Sales Tax: Nexus, Marketplace Facilitator & Multi-State Filing
Nexus thresholds after Wayfair, marketplace facilitator rules, and the registration / collection / remittance loop for multi-state SMBs.
Read sales taxSales Tax Penalties & Interest by State
Late filing and late payment penalties, the minimums that apply even when you owe nothing, and how each state sets interest.
Read penalties & interest1099-NEC and 1099-MISC Filing: Thresholds, Forms & Due Dates
When to issue 1099-NEC vs 1099-MISC, the $2,000 threshold (from 2026), January 31 due dates, and W-9 collection workflow.
Read 1099 filingUS Payroll: W-2, W-4, FICA, FUTA & Federal/State Withholding
W-4 onboarding, FICA + FUTA computation, state withholding, and the W-2 / W-3 cycle that closes out the year.
Read payroll & w-2State Franchise Tax: Delaware, California, Texas & New York
The flat-fee state taxes LLCs and corporations owe just for existing — DE annual report, CA $800 minimum, TX margin, NY biennial.
Read franchise taxAccounting software by city
Local guides for major US metros — bank coverage, state sales tax and nexus, and how HelloBooks automates the books.
Authoritative sources
US tax rules change every filing season. Always verify the current position with the official sources below before filing.
- IRS — irs.govInternal Revenue Service. Forms, publications, due dates, and current-year thresholds for federal income tax, payroll tax, and 1099 reporting.
- IRS — Forms & InstructionsCanonical PDF forms (W-4, W-9, 1099-NEC, 1040-ES, 941, 940, W-2, W-3) with current-year instructions.
- SSA — Business Services OnlineSocial Security Administration portal for W-2 / W-3 e-filing, EIN verification, and AccuWage validation.
- Streamlined Sales Tax — streamlinedsalestax.orgMulti-state Streamlined Sales and Use Tax Agreement (SSUTA) — registration in 24 SST member states with one application.
- Tax Foundation — Sales Tax & NexusIndependent state-by-state research on sales tax rates, economic nexus thresholds, and franchise / margin tax structures.
Run all of this on autopilot in HelloBooks
US sales tax, state franchise tax, and quarterly estimated tax workflows are built into the free plan. Plaid connects 11,000+ US banks so transactions land in your books automatically. 1099 generation and Gusto-backed payroll are in private preview — ask us for access.
Working with an accountant on HelloBooks
Free, vetted directory of independent firms. Every partnership tier is earned, never paid for — we verify credentials against the official registry before any profile goes live.