Estimated Taxes: What They Are and Who Needs to Pay

Estimated Taxes

If you're self-employed, own a small business, or earn income without tax withholding, this applies to you.

You may need to pay estimated taxes throughout the year—not just during tax season in April.

🔹 What Are Estimated Taxes?

Estimated taxes are quarterly payments sent to the IRS to cover your projected income and self-employment taxes. They ensure taxes are paid as you earn—not in one lump sum later.

🔹 Who Needs to Pay?

  • You’re self-employed or a freelancer
  • You own a business that earns profit
  • You receive rental income or investment income
  • You expect to owe $1,000 or more in taxes when filing

🔹 When Are They Due?

  • 📅 April 15 – for income earned January–March
  • 📅 June 15 – for April–May
  • 📅 September 15 – for June–August
  • 📅 January 15 (next year) – for September–December

📌 Note: If a due date lands on a weekend or holiday, it moves to the next business day.

🔹 How to Calculate and Pay

  • Estimate your total income for the year
  • Subtract deductions or business expenses
  • Use IRS Form 1040-ES to calculate payments
  • Pay online at irs.gov/payments or by mail

💡 Why It Matters

Skipping estimated payments may lead to:

  • ❌ IRS penalties and interest
  • ❌ A large tax bill when you file
  • ❌ Cash flow problems from lack of planning

💬 Pro Tip

Check in with a tax advisor mid-year. Adjust your estimates and payments to stay ahead and avoid surprises.

Need help managing your estimated taxes?

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