To plan for quarterly taxes, estimate what you will owe for the year, divide it into four payments, and set aside a fixed percentage of every deposit in a separate account. Owners generally must pay if they expect to owe $1,000 or more; 2026 payments are due April 15, June 15, September 15, and January 15, 2027.
Who has to pay quarterly estimated taxes?
Estimated tax exists because nobody withholds tax from business profits. According to the IRS, individuals — including sole proprietors, partners, and S corporation shareholders — generally have to make estimated payments if they expect to owe $1,000 or more when they file. Corporations face the same requirement at $500 or more.
For owners of pass-through businesses, the bill covers two things: income tax on your share of the profit, and self-employment tax. The self-employment tax rate is 15.3% — 12.4% for Social Security and 2.9% for Medicare — because you are paying both the employee and employer halves. That second piece is what surprises most first-year owners, who budget for income tax and forget they are now their own payroll department.
When are quarterly taxes due in 2026?
The IRS splits the year into four payment periods, and they are not evenly spaced. For the 2026 tax year the general due dates are:
- April 15, 2026 — income earned January through March
- June 15, 2026 — April and May
- September 15, 2026 — June through August
- January 15, 2027 — September through December
If a date falls on a weekend or legal holiday, the payment is on time on the next business day. Note that the second payment comes only two months after the first, which catches owners who plan on a strict every-three-months rhythm. You can pay through your IRS online account, Direct Pay, EFTPS, or by mailing a Form 1040-ES voucher — and the IRS lets you pay more often, such as monthly, as long as enough is paid by each due date. Most states with an income tax run their own estimated-payment schedule as well.
How much should you set aside for quarterly taxes?
The simplest reliable system is a percentage rule: move a fixed share of every deposit into a separate tax savings account the day it arrives, and pay the quarterly bill from that account. The percentage should cover your expected income tax rate plus the 15.3% self-employment tax on profit, and it depends on your bracket, state, and deductions — ask a tax professional to set yours, then revisit it each quarter as the year's numbers firm up.
To size each payment, use the worksheet in Form 1040-ES: project the year's profit, apply your expected income tax and the 15.3% self-employment tax, subtract any withholding, and divide by four. If your income is seasonal, the annualized income installment method in IRS Publication 505 lets you pay less in slow quarters and more in strong ones instead of four equal amounts. Clean, current books make all of this faster — see our small business tax prep guide for the year-round habits that keep the numbers ready.
How do you avoid an underpayment penalty?
The IRS safe-harbor rules let you avoid the underpayment penalty even if your estimate turns out low. Generally you are covered if you owe less than $1,000 after withholding and credits, or if you paid at least 90% of this year's tax or 100% of last year's tax, whichever is smaller. If your prior-year adjusted gross income was over $150,000 ($75,000 if married filing separately), the prior-year test rises to 110%.
For a growing business, the prior-year safe harbor is the easiest to plan around: take last year's total tax, divide by four, and pay that each period. You may still owe a balance in April, but no penalty, and you can build that balance into your reserve. Remember the penalty is calculated period by period, so catching up in January does not erase a missed June payment.
What if a quarterly payment would squeeze your cash flow?
A quarterly bill is a predictable expense, so the best defense is to treat it like rent: forecast it in your cash flow forecast and keep the tax account untouchable. A separate business emergency fund protects the tax money from being raided when an unexpected repair or slow month hits.
If a large payment still lands at a bad moment, the IRS offers payment plans, and some owners use short-term working capital to cover a tax bill rather than fall behind; our guide to business funding to pay a tax bill explains the trade-offs. The Broker Shop is a funding broker, not a lender — one application lets 50+ lenders compete for your business. It is free to apply, and checking your options won't affect your credit score.
Frequently Asked Questions
What happens if I miss a quarterly estimated tax payment?
The IRS may charge an underpayment penalty, calculated separately for each payment period based on how much was short and for how long. Make the missed payment as soon as possible to stop the penalty from growing, and pay the next period on time. Meeting a safe-harbor amount for the year generally avoids the penalty.
Do I have to pay quarterly taxes in my first year of business?
Possibly. If you expect to owe $1,000 or more in federal tax for the year after withholding and credits, estimated payments generally apply from the period you first earn the income. If you had no tax liability in the prior full year, you may qualify for an exception, so check with a tax professional.
Sources: IRS — Estimated taxes · IRS — Publication 505, Tax Withholding and Estimated Tax · IRS — Self-employment tax (Social Security and Medicare taxes)
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See What I Qualify For →The bottom line: Estimate the year's tax, pay it in four installments by the 2026 due dates, set aside a fixed share of every deposit, and use the safe-harbor rules so a low estimate never becomes a penalty.