Quarterly Taxes
Estimated tax payments due four times per year for self-employed individuals.
Quarterly taxes are estimated payments due on April 15, June 15, September 15, and January 15 of the following year. They cover income tax and self-employment tax not withheld by an employer. The IRS expects you to "pay as you go," and underpayment penalties apply if you owe more than $1,000 at filing time without meeting safe harbor thresholds.
Example
A consultant earning roughly $40,000 per quarter sets aside 30% ($12,000) each quarter and submits payments via IRS Form 1040-ES.
Why It Matters for Your Business
Missing quarterly payments results in penalties that accumulate daily, so staying on schedule prevents a surprise tax bill and avoids unnecessary fees.
Practical Tips
- •Mark quarterly due dates in your calendar and set aside funds from every client payment.
- •Use IRS Form 1040-ES worksheet or tax software to calculate each payment amount.
Related Terms
More Taxes Terms
Adjusted Gross Income
Gross income minus specific deductions like retirement contributions.
Tax Audit
An examination of tax returns by the IRS to verify accuracy.
Capital Gains
Profit from selling an asset for more than its purchase price.
Capital Loss
Loss from selling an asset for less than its purchase price.
Tax Deduction
An expense that reduces taxable income.
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