Estimated tax payments are the quarterly payments the IRS expects from people whose income isn't fully covered by withholding, such as freelancers, sole proprietors and partners. You generally have to make them if you expect to owe $1,000 or more when you file, and the 2026 due dates are 15 April, 15 June and 15 September 2026, and 15 January 2027.
The IRS puts it plainly: tax has to be paid as you earn or receive income during the year. If you're self-employed nobody's withholding it for you, so you pay it yourself in four instalments using Form 1040-ES.
Who has to pay estimated tax
| Taxpayer | Generally pays estimated tax if they expect to owe (as of October 2026) |
|---|---|
| Individuals, including sole proprietors, partners and S corporation shareholders | $1,000 or more when the return is filed |
| Corporations | $500 or more when the return is filed |
The IRS lists the kinds of income that usually trigger it: self-employment income, interest, dividends, alimony, capital gains, and prizes and awards. Farmers, fishermen and some higher-income taxpayers have different rules, set out in Publication 505.
There's also an exception worth knowing. The 2026 Form 1040-ES says you don't have to pay estimated tax for 2026 if you were a US citizen or resident alien for all of 2025 and had no tax liability for the full 12-month 2025 tax year. No tax liability means your total tax was zero or you didn't have to file.
2026 estimated tax due dates
| Payment | Due date |
|---|---|
| 1st payment | 15 April 2026 |
| 2nd payment | 15 June 2026 |
| 3rd payment | 15 September 2026 |
| 4th payment | 15 January 2027 |
Two details from the form and the IRS page. First, you can skip the 15 January 2027 payment if you file your 2026 return by 1 February 2027 and pay the entire balance with it. Second, if a due date falls on a Saturday, Sunday or legal holiday, the payment's on time if you make it on the next working day. A mailed payment counts from the US postmark date.
The safe harbor: how to avoid the penalty
If you don't pay enough during the year, you can owe an underpayment penalty, and the IRS says that can happen even if you're due a refund when you file. Under the general rule in Form 1040-ES, you'll generally avoid it if your payments and withholding cover the smaller of:
- Nine tenths of the tax on your 2026 return, or
- All of the tax shown on your 2025 return, as long as that return covered all 12 months
Here's the catch for growing businesses. If your 2025 adjusted gross income was more than $150,000 ($75,000 if married filing separately), the prior-year option rises: you need to pay one tenth more than your 2025 tax, not just the same amount. If at least two-thirds of your gross income comes from farming or fishing, the threshold drops to two-thirds of this year's tax instead.
The IRS also says you'll generally avoid the penalty if you owe less than $1,000 after withholding and credits.
Uneven income? You don't have to pay four equal amounts
If your income comes in lumps, such as one big contract in the autumn, the IRS says you may be able to lower or avoid the penalty by annualizing your income and making unequal payments, using Form 2210. You can also pay more often than quarterly: weekly, every two weeks or monthly all work, as long as you've paid enough by the end of each period.
Late payments and refunds
Two things surprise people here. The IRS says you can be charged a penalty if a payment is late even when you end up due a refund at filing time, because the penalty is worked out period by period. And if you overestimated, you don't have to keep paying the higher amount: the IRS says to complete another Form 1040-ES worksheet and lower the remaining payments. The penalty can also be waived in some cases, for example where the underpayment was due to a casualty, disaster or other unusual circumstance.
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How to work out and pay it
- Start with last year's return as your guide, then estimate this year's income, deductions and credits.
- Use the worksheet in Form 1040-ES to work out the amount. Nonresident aliens use Form 1040-ES (NR).
- Include self-employment tax. My guide to Schedule SE explains how that's calculated.
- Pay through your IRS online account, Direct Pay or EFTPS, or by mail with a payment voucher.
- If your income changes during the year, rework the worksheet and adjust the remaining payments.
If you've not worked out your business profit yet, start with Schedule C, because that figure feeds both your income tax and your self-employment tax.
My verdict
Set the four dates in your diary now and pay at least the same tax as last year, split into four. That's the simplest way to stay inside the safe harbor while your business grows, as long as your income was under $150,000 last year. Above that, add the extra tenth. And if most of your income lands late in the year, look at the annualized method rather than paying penalties you didn't need to. If you're still working out what counts, my guide on how side hustles are taxed covers the basics.
Frequently asked questions
Who has to make estimated tax payments?
Individuals, including sole proprietors, partners and S corporation shareholders, generally do if they expect to owe $1,000 or more when they file. Corporations generally do if they expect to owe $500 or more.
When are estimated tax payments due for 2026?
15 April 2026, 15 June 2026, 15 September 2026 and 15 January 2027.
Can I skip the January estimated tax payment?
Yes, if you file your 2026 return by 1 February 2027 and pay the entire balance due with it.
How do I avoid the estimated tax penalty?
Generally by paying the smaller of nine tenths of this year's tax or all of last year's tax, or by owing less than $1,000 after withholding and credits. Higher earners need one tenth more than last year's tax.
What form is used for estimated tax?
Individuals use Form 1040-ES to figure and pay estimated tax. Nonresident aliens use Form 1040-ES (NR).
Can I pay estimated tax monthly?
Yes. The IRS says you can pay weekly, bi-weekly or monthly, as long as you've paid enough by the end of each quarter.
