Resource Article
Estimated Quarterly Taxes for Freelancers: How Much and When
If you're a freelancer who expects to owe $1,000 or more when you file, you generally need to make estimated tax payments four times a year. The next one is due January 15, 2027. Then for 2027 the dates are April 15, June 15 and September 15, 2027, and January 18, 2028. To avoid the underpayment penalty, pay at least the smaller of 90% of this year's tax or 100% of last year's (110% if last year's AGI was over $150,000). Safe harbor protects you from the penalty, not from a balance due in April, so the worked example below shows both numbers.
Who has to pay estimated taxes?
When you work for yourself, no one withholds income tax or Social Security and Medicare from your pay. Estimated payments are how you pay as you go. You generally need to make them if you expect to owe $1,000 or more after withholding and credits when you file.
You don't owe an underpayment penalty for this year if you had no tax liability last year, you were a U.S. citizen or resident for the whole year, and last year's return covered 12 months. That often helps in your first year out of a W-2 job, but you'll still owe the full tax in April, so set money aside anyway. (If you just made the jump, my first-steps checklist covers the basics.)
When are estimated taxes due?
Each payment covers income earned in a set period. The periods aren't equal quarters:
| Income earned | 2026 tax year | 2027 tax year |
|---|---|---|
| January 1 – March 31 | April 15, 2026 | April 15, 2027 (Thursday) |
| April 1 – May 31 | June 15, 2026 | June 15, 2027 (Tuesday) |
| June 1 – August 31 | September 15, 2026 | September 15, 2027 (Wednesday) |
| September 1 – December 31 | January 15, 2027 (Friday) | January 18, 2028 (Tuesday) |
When a due date falls on a weekend or legal holiday, it moves to the next business day. January 15, 2028 is a Saturday and Monday, January 17, 2028 is Martin Luther King Jr. Day, so the last 2027 payment is due Tuesday, January 18, 2028.
Skipping the January payment: if you file your 2026 return by February 1, 2027 and pay everything you owe, you don't need to make the January 15, 2027 payment.
How much do I need to pay?
You generally avoid the underpayment penalty if your withholding plus estimated payments, paid on time, add up to at least the smaller of:
- 90% of your current-year tax, or
- 100% of your prior-year tax (110% if your prior-year AGI was more than $150,000, or $75,000 if married filing separately).
The prior-year option is called safe harbor, and it's usually the easiest. You already know last year's number; it's on your return. Divide it by four and pay that each due date.
"Tax" here means your total tax, including self-employment tax: 15.3% on 92.35% of your net self-employment earnings, with the Social Security part capped at the wage base ($184,500 for 2026).
How do I calculate my estimated payments?
- Estimate your net profit for the year: income minus business expenses.
- Figure self-employment tax: net profit × 92.35% × 15.3%.
- Figure income tax: start with your profit, subtract half of your self-employment tax, your standard (or itemized) deduction, and any qualified business income (QBI) deduction, then apply the tax brackets.
- Add them up, subtract any withholding, and compare the result to your safe harbor amount.
- Revisit each quarter. If your income changes, adjust the next payment.
Worked example: safe harbor vs. what you'll actually owe
This is an example with made-up numbers, not a real client. 2026 federal rates, single filer, standard deduction ($16,100), no other income or withholding.
Jordan left a W-2 job at the end of 2025 and freelances full-time in 2026. Jordan's 2025 return showed $7,000 of total tax on $70,000 of AGI. Jordan expects $90,000 of net profit in 2026.
Option A: Safe harbor (100% of last year)
$7,000 ÷ 4 = $1,750 per payment. That protects Jordan from the federal underpayment penalty.
Option B: Pay toward the actual 2026 bill
| Amount | |
|---|---|
| Self-employment tax ($90,000 × 92.35% × 15.3%) | $12,717 |
| Federal income tax (after half of SE tax, standard deduction and QBI deduction) | $6,599 |
| Expected 2026 federal tax | $19,316 |
| Divided by 4 | $4,829 per payment |
Under Option A, Jordan still owes about $12,316 in April 2027 ($19,316 − $7,000). No penalty, but a big bill. Many freelancers land in between: pay at least safe harbor on time, and put the difference in a separate tax savings account every time a client pays.
Arizona: Jordan's 2025 Arizona gross income was $70,000, under the $75,000 single threshold, so Arizona doesn't require estimated payments for 2026, even though 2026 income is higher. Jordan will still owe Arizona tax (2.5% flat rate) when filing and can make voluntary payments.
What if my income is uneven?
The standard method assumes you earn income evenly and pay four equal installments. If most of your income comes late in the year, that can make it look like you underpaid early on, even if you didn't.
The annualized income installment method (Form 2210, Schedule AI) fixes that. It figures each required payment based on what you actually earned through the end of each period. If you earned little in the first half of the year and a lot in the fall, your required early payments can be much smaller. It means more paperwork at tax time, but it can reduce or eliminate a penalty for seasonal or lumpy income.
How do I pay estimated taxes?
- IRS Online Account: sign in, make a payment, and see the estimated payments you've made. This is now the IRS's main recommended path for individuals.
- IRS Direct Pay: free, no sign-in required, straight from your checking or savings account. Choose "estimated tax" and the correct tax year.
- EFTPS: the IRS no longer accepts new EFTPS enrollments from individual taxpayers. If you already use it, you can keep using it for now. New users should use their Online Account or Direct Pay instead.
- Debit or credit card: available through IRS-approved processors, which charge their own fees.
- Mail: a check with the Form 1040-ES voucher. The postmark date counts as the payment date.
If you or your spouse also have a W-2 job: increasing withholding is another option. Withholding is generally treated as paid evenly through the year, even if it happens late, which can help cover an early-year shortfall.
What about Arizona estimated payments?
Arizona has its own rules:
- Who must pay: you're required to make Arizona estimated payments for 2026 if your Arizona gross income was more than $75,000 in 2025 and is expected to be more than $75,000 in 2026 ($150,000 for each year if married filing jointly). For full-year residents, Arizona gross income is your federal AGI.
- How much: with withholding, at least 90% of your 2026 Arizona tax or 100% of your 2025 Arizona tax. Arizona's 2026 rate is a flat 2.5%.
- When: the same dates as federal: April 15, June 15, September 15, 2026, and January 15, 2027. If you file your 2026 Arizona return by February 1, 2027 and pay in full, you don't need the January payment.
- How: online at AZTaxes.gov (choose "140ES: Estimate Payments"), or by mail with Form 140ES.
- Penalty: figured on Arizona Form 221. It equals the interest on the underpayment and can't be more than 10% of the underpayment.
What's the penalty for underpaying?
The federal underpayment penalty works like interest. It's figured separately for each payment period, based on how much you underpaid and for how long, at the IRS underpayment rate. That rate is 7% a year for October through December 2026. You can owe it even if you end up getting a refund.
Unlike most penalties, it generally can't be removed for reasonable cause. The IRS can waive it for a casualty, disaster or other unusual circumstance, or if you retired after age 62 or became disabled in the past two years and had reasonable cause. Form 2210 is how you show you qualify for an exception or the annualized method.
Do I have to pay estimated taxes in my first year of freelancing?
Possibly not to avoid the penalty: if you had no tax liability for the prior full year, you're exempt. Most people leaving a W-2 job did have a liability, though, so the safe harbor rules apply. Either way, the full tax is due when you file, so set money aside from day one.
Can I pay all my estimated tax at once?
Yes. You can pay the whole year's estimate by the first due date (April 15). You can also pay more than required in any quarter. What you can't do without risking a penalty is pay too little early and catch up at the end, unless the annualized method shows you didn't owe more earlier.
What happens if I miss a payment?
Make it as soon as you can. The penalty is figured day by day at the interest rate, so a payment a few weeks late costs much less than one that's months late. Then get back on schedule for the next due date.
Before your next payment
This is general information, not advice for your own tax situation. The right payment depends on your income, deductions, state and what you paid last year. If you'd like help setting up a quarterly payment plan you can stick to, reach out through my contact form. My monthly bookkeeping keeps the numbers current so each payment is based on real data, not a guess.