What quarterly tax payments are and who needs to make them
Quarterly tax payments are installments of federal income tax you send to the IRS four times a year instead of waiting until April 15. You owe them if you are self-employed, a freelancer, a gig worker, or someone whose employer does not withhold enough tax from your paycheck. The IRS calls these estimated tax payments.
You do not have to make quarterly payments if your employer withholds tax from every paycheck and you expect to owe less than $1,000 when you file your return. If you owe more than that and did not pay it through withholding or quarterly payments, you may face a penalty even if you pay the full amount by April 15.
The four payment dates fall on the 15th of April, June, September, and January — though if the 15th lands on a weekend or federal holiday, the deadline moves to the next business day. Each payment covers the income you earned during a three-month period, though the IRS does not require you to pay exactly one-quarter of your annual tax in each installment.
Key Takeaways
- Quarterly payments are due on April 15, June 15, September 15, and January 15 of the following year, with deadlines shifting to the next business day if they fall on a weekend or holiday.
- You calculate what to pay using IRS Form 1040-ES, which walks you through estimating your income and subtracting deductions to find your tax liability.
- You can pay online through IRS Direct Pay or EFTPS, by mail with Form 1040-ES, or by phone, and the IRS records your payment within one to three business days.
- Underpayment penalties apply if you pay too little across the year, but you can adjust your payment amount each quarter if your income changes.
- If you miss a deadline, pay as soon as you can; the penalty is small if you catch up within a few days, but grows the longer you wait.
Calculating how much to pay using Form 1040-ES
The IRS provides Form 1040-ES, a worksheet that walks you through estimating your tax for the year. You start by projecting your total income for the year — wages, self-employment income, rental income, investment gains, or anything else taxable. Then you subtract deductions: the standard deduction (which varies by filing status and age), business expenses if you are self-employed, or itemized deductions if you have them.
The form then calculates your estimated tax liability using the current tax brackets and rates. It also accounts for tax credits you expect to claim, such as the Earned Income Tax Credit or child tax credits, which reduce what you owe. The result is your total estimated tax for the year. You divide this by four to find each quarterly payment, though you can pay different amounts each quarter if your income is uneven.
Form 1040-ES is free and available on the IRS website. Many tax software programs also include an estimated tax calculator that does this math for you. If your income is irregular — for example, you earn most of your money in summer — you can use the annualized income method on the form to pay more in high-income quarters and less in slow quarters.
Payment methods and where to send your money
IRS Direct Pay is the fastest and most direct route. You go to irs.gov, enter your tax information and bank account details, and schedule a payment for any date up to the deadline. The IRS deducts the money from your account on the date you choose and sends you a confirmation number immediately. There is no fee.
EFTPS (Electronic Federal Tax Payment System) is another free online option. You enroll once at eftps.gov, then log in each quarter to schedule payments. EFTPS requires enrollment at least one business day before your first payment, so if you are paying for the first time, register early.
You can also pay by mail. Print Form 1040-ES, fill in your payment amount and personal information, and mail it with a check to the IRS address listed in the form instructions — the address varies by state. Mail payments take longer to process, so send them at least one week before the deadline. The IRS records receipt based on the postmark date, not the date they open the envelope.
Credit card and debit card payments are possible through third-party payment processors, but they charge a fee (usually 1.5 to 2 percent of your payment). Phone payments are also available; call the number on the back of your tax return or in Form 1040-ES instructions.
Deadlines for each quarterly payment
| Quarter | Income Period | Payment Due Date |
|---|---|---|
| First | January 1 – March 31 | April 15 |
| Second | April 1 – May 31 | June 15 |
| Third | June 1 – August 31 | September 15 |
| Fourth | September 1 – December 31 | January 15 (next year) |
If any of these dates falls on a Saturday, Sunday, or federal holiday, the deadline moves to the next business day. For example, if April 15 is a Saturday, you have until Monday, April 17. The IRS website lists the exact deadline for each quarter each year.
The fourth quarter payment is due January 15 of the following year. If you file your tax return and pay any remaining balance by April 15, you do not owe a penalty on the fourth quarter payment even if you paid it late — as long as you pay the full amount by the April deadline.
What happens if you pay too little or miss a deadline
If your total quarterly payments fall short of what you owe, the IRS charges an underpayment penalty when you file your return. The penalty is calculated based on how much you underpaid and for how long. If you underpaid by $500 for three months, the penalty is smaller than if you underpaid by $500 for nine months. The penalty rate changes quarterly and is tied to current interest rates; it is typically between 6 and 8 percent annually.
You can reduce or avoid the penalty if you paid at least 90 percent of your current year tax or 100 percent of your prior year tax through withholding and quarterly payments combined. If your prior year tax was over $150,000, the threshold is 110 percent of that amount. This is called the safe harbor rule.
If you miss a quarterly deadline, pay as soon as you realize it. The penalty grows each day you are late, but it is small if you catch up within a few days. There is no separate "late payment" penalty for quarterly taxes — only the underpayment penalty calculated at tax time. If you know you will miss a deadline, paying a few days late is better than not paying at all.
Adjusting payments if your income changes
You are not locked into the amount you calculated on Form 1040-ES. If your income rises or falls during the year, you can recalculate and adjust your next payment. For example, if you earned much less in the first quarter than you expected, you can file a new Form 1040-ES and pay less for the second quarter.
Conversely, if you had a very profitable quarter, you can increase your next payment to avoid underpayment penalties. Some self-employed people recalculate after each quarter based on actual income rather than estimates. This approach requires more work but can prevent overpaying or underpaying significantly.
If you realize mid-year that you will owe much more or much less than you estimated, adjust your withholding if you have a W-2 job, or increase your quarterly payment if you are self-employed. The sooner you correct course, the smaller the penalty if you end up underpaying.
Tracking payments and what records to keep
When you pay through IRS Direct Pay or EFTPS, you receive a confirmation number immediately. Write this down or save the email confirmation. When you pay by mail, keep a copy of the check and the envelope you mailed it in, or use certified mail so you have proof of the postmark date.
The IRS records your payments in their system within one to three business days of receipt. You can check your payment history anytime by logging into your IRS account at irs.gov or by calling the IRS at 1-800-829-1040. Have your Social Security number and tax return information ready.
When you file your tax return, the IRS automatically credits your quarterly payments against what you owe. You do not have to report them separately on your return — the IRS matches them to your account. Keep your confirmation numbers and payment records for at least three years in case the IRS questions a payment.
Frequently Asked Questions
Do I have to pay quarterly taxes if I am an employee with a side business?
Only if your employer does not withhold enough tax from your paycheck to cover your total tax liability for the year. If you earn $50,000 as an employee and $20,000 from freelance work, your employer withholds based on the $50,000 only. You may owe quarterly payments on the $20,000 to avoid an underpayment penalty. Use Form 1040-ES to calculate whether you need to pay.
What if I cannot afford to pay the full amount by the deadline?
Pay whatever you can by the deadline. The underpayment penalty is based on the shortfall, so paying $1,000 of a $2,000 estimated payment is better than paying nothing. You can also set up a payment plan with the IRS after you file your return if you owe a large balance.
Can I use last year's tax return to calculate this year's payments?
Yes, if your income is similar. Form 1040-ES allows you to base your estimate on your prior year tax liability. This is simpler than projecting income, but it can lead to underpayment if your income rises significantly. If your income is growing or unstable, recalculate based on current projections.
What if I overpay my quarterly taxes?
The overpayment is credited to your tax return when you file. You can choose to have it refunded to you, applied to next year's taxes, or split between the two. You will see this option when you file your return.
Do I need to file a return if I only make quarterly tax payments?
Yes. Quarterly payments are not a substitute for filing a return. You must file Form 1040 or another appropriate return by April 15 to report your income and claim deductions and credits. The quarterly payments are simply prepayment of the tax shown on that return.