Quarterly estimated taxes: Calculation and payment guide for 2026

Published 13 January 2026

Table of contents

• What are quarterly estimated taxes?
• Who needs to pay quarterly estimated taxes?
• When are quarterly estimated taxes due?
• How to estimate quarterly taxes
• How to make quarterly estimated tax payments
• Simplify quarterly tax payments with Xero
• FAQs on quarterly estimated taxes

Key takeaways

• Individuals must make quarterly tax payments if a) they owe over $1000 in taxes, and b) the funds weren't withheld from their paychecks or other payments. Corporations must pay estimated quarterly payments if they owe over $500.
• Estimated quarterly taxes are due on the 15th of the month following the end of the quarter.
• Safe harbor rules protect you from penalties if you pay 90% of the current year's tax liability or 100% of last year's tax liability (110% if you're a high-income earner).
• You can base your payments on last year's tax liability, or use Form 1040-ES to estimate the amount due based on your current year's income.
• There are many payment options. For example, you can pay online, by mail, or in person.

What are quarterly estimated taxes?

Quarterly estimated taxes are tax payments that taxpayers send to the IRS four times each year. You must send these quarterly payments to cover federal income tax and self-employment taxes that are not withheld from your wages or other payments.

Learn more about estimated taxes from the IRS.

Who needs to pay quarterly estimated taxes?

Individual taxpayers must make estimated quarterly tax payments if:

• they owe more than $1000 in taxes for the year
• that money wasn't withheld from their wages or other payments

But even if you owe more than $1000, there's a safe harbor rule that lets you avoid penalties as long as you pay at least 90% of your current year's tax liability, or 100% of your prior year's tax liability.

But if you’re a high earner, you need to pay more – 110% of last year's tax liability if your 2024 adjusted gross income (AGI) was higher than $150,000, or $75,000 if you filed as “married filing separately.”

The following types of taxpayers may need to pay estimated quarterly taxes:

• freelancers, independent contractors, self-employed taxpayers, and gig workers
• sole proprietors
• small business owners
• partners and S-Corp shareholders
• investors
• retirees (if you don't have enough tax withheld from your retirement account distributions)
• W-2 employees (if you don't have enough tax withheld from your paychecks)

Corporations need to pay estimated quarterly taxes if they owe more than $500 for the year.

When are quarterly estimated taxes due?

Estimated quarterly taxes are due on the 15th of the month that immediately follows the end of the quarter. For estimated payments, the IRS uses a slightly different schedule than it does for payroll and other quarterly federal taxes.

Here are the quarters and their due dates:

• Q1 (January 1–March 31): April 15
• Q2 (April 1–May 31): June 15
• Q3 (June 1–August 31): September 15
• Q4 (September 1–December 31): January 15

If the 15th falls on a weekend or holiday, the due date moves to the next business day.

How to estimate quarterly taxes

There are a couple of different ways to calculate your estimated quarterly taxes. The right option depends on your situation and your tolerance for complicated forms.

Option 1: Paying 100% of last year's tax liability

This is the easiest option for most taxpayers. You take the amount you owed last year and send in one quarter of that amount on each due date. For instance:

• If your 2025 tax return shows that you owe $10,000, you can send in $2500 for each of your 2026 estimated quarterly payments.
• If your AGI was more than $150,000 in 2025, you need to pay at least 110% of last year's liability to avoid penalties – in this case, multiply last year's tax due by 1.1, then divide by 4.

Most tax preparation software generates payment slips with the quarterly estimated payments calculated in this way – you can mail in the slips with your payments or pay online (see below). This ensures you pay at least 100% of last year's tax liability – even if that doesn't cover your full tax liability, it protects you from underpayment penalties.

Option 2: Using the Form 1040-ES worksheet

The worksheet portion of the 1040-ES form helps you calculate your quarterly payments based on your anticipated income for the current year. It essentially helps you calculate your potential tax liability for the full year and then prompts you to divide the total by 4.

Using the worksheet helps ensure your payments reflect your current year's income – important if your income is lower than the previous year and you don't want to overpay, or if your income is a lot higher and you don't want a big tax bill.

But it's complicated to do – you must estimate income and do a lot of calculations about tax and credits. Ask your accountant for help.

The IRS has more info about the 1040-ES.

How to make quarterly estimated tax payments

There are several ways to pay your estimated quarterly taxes. Here are the main options:

Option 1: IRS Direct Pay

IRS Direct Pay lets you make free payments from your bank account. Go to the IRS's website and follow the links for business or individual taxpayers. Then select Estimated payments and the tax return associated with your payment (for instance, 1040 for individuals, 1065 for partnerships, or 1120 for corporations).

• If you’re paying as an individual, you must provide your AGI from a prior year's tax return to verify your identity.
• If you’re filing for your business, include the business name and EIN to verify.

Option 2: EFTPS (Electronic Federal Tax Payment System)

You can make estimated payments through the EFTPS website. Individuals can sign in using their ID.me credentials, while businesses generally need to set up a business tax account. Note that at some point in 2026, the IRS plans to disable this service for quarterly estimated payments for individuals, but it will still be available for businesses.

Option 3: IRS online account

You can also make payments through your IRS online account. The IRS offers different online accounts for individuals and businesses. You can pay with a bank transfer or use a third-party service to set up credit or debit card payments.

Option 4: Credit/debit card payments through a payment processor

The IRS contracts with two private companies to accept payments from credit or debit cards, or digital wallets. You can also use these services to facilitate cash payments. The service will generate a barcode along with instructions on where to take your payment. You can then make a cash payment through a wide range of participating companies, like 7-Eleven, Walgreens, and CVS. It can take a while to generate the barcode, so this isn’t an effective way to make last-minute payments.

The IRS web page on debit/credit card payments has fee information and links to Pay1040 and ACI Payments, Inc.

Option 5: Mailing in your payments

You can mail in payments with the vouchers you get from your previous year's tax return or with Form 1040-ES. Use checks or money orders to make the payment – note your tax ID number, the quarter, the year, and "estimated tax" payment on the memo line.

Use the Form 1040-ES instructions to work out where to mail your payment.

Simplify quarterly tax payments with Xero

Xero makes it easy to track your income and expenses so you have all the information you need to estimate your quarterly payments.

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FAQs on quarterly estimated taxes

Review these frequently asked questions:

What happens if I miss a quarterly tax payment?

Nothing happens until you file your annual return. You can then make a payment at that point, but you'll owe a penalty for paying late. If you're on an IRS payment plan for back taxes, your payment plan will go into default if you miss an estimated quarterly payment.

Do I need to pay quarterly taxes in my first year of business?

Generally, no. As long as you pay 100% (110% for high-income taxpayers) of your previous year's tax liability, the safe harbor rule helps you avoid penalties for not paying estimated taxes. If it's your first year in business, you probably won't have a tax liability for the previous year, so you won't get into trouble if you don't make estimated payments.

Can I pay more than the required quarterly amount?

Definitely. And if you end up overpaying, the IRS will refund that money when you file your annual tax return. When possible, avoid overpaying throughout the year – although it can be fun to get a tax refund, it also means that you've given the IRS an interest-free loan for the year.

What if my income varies significantly quarter to quarter?

You have a couple of choices. You can either pay the same amount every quarter based on your annual earnings, or you can complete a 1040-ES every quarter to make sure your payment reflects your earnings for the quarter.

How do I know I'm paying enough in estimated taxes?

Compare last year's earnings to the current year. If each year’s earnings are roughly the same, you can base your payments on last year's tax liability. If your current year's earnings are much higher, you should use Form 1040-ES to estimate your payments – otherwise, you risk not paying enough.

Do quarterly tax payments cover both federal and state taxes?

No – your quarterly estimated payments only apply to federal taxes, so check your state’s rules – you may also need to make quarterly payments to your state.