The American tax system is considered a pay-as-you-earn system. Pay-as-you-earn means the IRS requires you to make payments towards your tax bill as you earn income. If you’re employed by someone else, your employer will typically withhold a portion of your income based on your W-4. When you are self-employed, you’re responsible for withholding income for taxes.
On the other hand, if you are self-employed—such as having a side gig, running a small business, or working freelance—you are responsible for withholding your income for taxes. Being self-employed means that taxes are not automatically deducted from your earnings. Self-employed individuals can make estimated tax payments throughout the year or pay their tax bill in a lump sum when they file their tax returns.
To avoid penalties for underpayment of taxes, it is important to ensure you are paying enough throughout the year and to make your payments on time. You are responsible for making payments toward your tax bill – either through an employer or by making estimated payments.
Who has to pay quarterly taxes?
You must pay quarterly estimated payments using Form 1040-ES, if the following apply:
- Your estimated tax due is $1,000 or more
- You expect your withholding and refundable credits to be less than:
- 90% of your 2024 tax liability
- Or 100% of your 2023 tax liability
If you earn more than $400 from self-employment, your estimated tax payment should include the amount you owe for self-employment tax.
Should you make quarterly estimated tax payments or pay one lump sum?
If you think you’ll owe less than $1,000 in taxes, you can choose to either make estimated payments or pay it all as a lump sum when you file your tax return – without penalty.
If you expect to owe $1,000 or more in taxes when you file your tax return, you should pay estimated taxes throughout the year. Additionally, you will need to ensure your payments are accurately estimated to avoid a penalty for underpayment of your taxes. You will not be penalized if you pay at least 90% of the current year’s tax bill through withholding or estimated taxes. You can also avoid the penalty if you estimate your current year’s tax bill by paying the same amount (100%) from your prior-year return.
To ensure you don’t miss a payment and receive a fine, the IRS encourages self-employed taxpayers to “pay as you go, so you won’t owe.” Keeping records of all your income and expenses is extremely important and will make filing estimated taxes much more straightforward.
Quarterly tax due dates in 2025
Find the 2025 deadlines for quarterly estimated payments below:
| Quarterly Payment | Payment Period | Due Date |
| Q1 of 2025 | January 1 – March 31 | April 15, 2025 |
| Q2 of 2025 | April 1 – May 31 | June 16, 2025 |
| Q3 of 2025 | June 1 – August 31 | September 15, 2025 |
| Q4 of 2025 | September 1 – December 31 | January 15, 2026 |
How to pay quarterly estimated self-employment tax
As a first step, complete the worksheet portion of Form 1040-ES to determine the amounts of your estimated taxes. This form lists the payment due dates, as well as a list of documents needed to calculate the estimated tax.
The IRS will allow you to make estimated quarterly payments in several ways. For example, you can use direct pay via bank account, credit or debit card, electronic federal tax payment system, mailing a check to the IRS, or paying cash with certain retail partners. How and where to send payments is also detailed on Form 1040-ES.
Information needed for Form 1040-ES
Self-employed workers should be prepared to answer questions about their expected adjusted gross income, what portion of that is taxable, and credits and deductions. Having a prior-year tax return is especially helpful while completing Form 1040-ES.
Tips for estimating quarterly self-employment tax
How much you pay each quarter depends on a few factors, including significant life events such as a death in the family or divorce. Self-employed workers should also consider tax laws, which change frequently. It’s a good idea to reference the IRS website for guidance on this topic. And you can use TaxSlayer’s Refund Calculator to estimate your tax liability.
If you’re self-employed, you can estimate quarterly payments by first projecting your expected annual income, taking into account any variations throughout the year. Next, calculate your net earnings by deducting allowable business expenses (like business mileage) from your gross income. To determine the quarterly payment, they can use the IRS Form 1040-ES, which provides worksheets for estimating tax liability based on those income thresholds.
What happens if you miss a quarterly estimated tax payment?
If you are required to make quarterly payments and miss the deadline for making a payment, the IRS will charge you a penalty. Even if you are only a day late, they will penalize you for underpaying your taxes.
The penalty amount depends on how much you owe and how late your payment is. If you pay immediately after the deadline, you will owe less than if you put it off. It’s always a good idea to review the IRS’s guide for due dates to ensure estimated quarterly payments are on time.
