If you’re self-employed or have income that isn’t subject to withholding, you likely need to make quarterly estimated tax payments. Here’s everything you need to know.
Who Needs to Pay Quarterly Taxes?
You should make quarterly payments if you expect to owe $1,000 or more when you file your return. This includes:
- Self-employed individuals
- Freelancers and contractors
- Small business owners
- Investors with significant dividend or interest income
- Landlords with rental income
2024 Quarterly Tax Due Dates
| Period | Due Date |
|---|---|
| January 1 – March 31 | April 15, 2024 |
| April 1 – May 31 | June 17, 2024 |
| June 1 – August 31 | September 16, 2024 |
| September 1 – December 31 | January 15, 2025 |
How to Calculate Your Quarterly Payment
There are two methods:
- Safe Harbor Method: Pay 100% of last year’s tax (110% if AGI > $150,000)
- Estimated Income Method: Pay 90% of current year’s estimated tax
How to Make Payments
- IRS Direct Pay: Free electronic payment from bank account
- EFTPS: Electronic Federal Tax Payment System
- Mail: Form 1040-ES with check
- Credit/Debit Card: Through approved processors (fees apply)
Penalties for Underpayment
If you don’t pay enough quarterly taxes, you may face:
- Underpayment penalties (currently around 8% annual rate)
- Interest on unpaid amounts
- Larger tax bill in April
Pro Tips
- Set aside 25-30% of income for taxes
- Use separate savings account for tax money
- Track estimated payments for year-end return
- Adjust payments if income fluctuates
Struggling with estimated tax payments? Let Pakala Tax Pro handle your quarterly tax calculations and filings.