The IRS requires taxpayers to pay taxes as they earn income throughout the year. For those who do not have withholding, they must pay quarterly estimated payments.

Quarterly estimated payments are especially relevant for independent contractors, freelancers, and businesses. Failing to complete quarterly estimated payments may result in paying interest and a penalty in addition to the tax due.

Quarterly payments are generally due in January, April, June, and September. Payment dates are typically the 15th, although they may be adjusted to the 16^th if the 15^th falls on a Sunday.

What is the Requirement Threshold?

Any taxpayer who expects to owe more than $1,000 for the tax year must file estimated payments if their paychecks don't include withholding. Taxpayers can include individuals, sole proprietors, partners, and shareholders of S corporations.

Corporations, in comparison, must file quarterly if they expect to have a tax bill of at least $500.

To determine estimated tax, a taxpayer should complete Form 1040-ES. To calculate tax, a taxpayer will need to determine their expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.

Can a Taxpayer Catch Up If They Missed a Quarter?

If taxpayers miss a quarterly payment, they should pay it as soon as they can. The longer a taxpayer waits to pay, the more they'll end up paying in potential penalties and interest.

If a taxpayer cannot pay the full amount by the quarterly deadline, they should pay what they can to reduce penalty and interest payments. Penalties will also be waived in certain circumstances. If a taxpayer, for example, earns less than $150,000 and pays an amount equal to the previous year's tax liability, they will likely not be assessed a penalty.

What are the Interest and Penalties for Failing to Make Payments?

Individuals may be subject to a penalty for underpaying their estimated tax. They may be able to avoid this penalty if they owe less than $1,000 in tax after subtracting withholdings and credits. They may also avoid a penalty if they paid at least 90 percent of the current year's tax or 100 percent of the previous year's tax shown on the return for the prior year, whichever is smaller.

The interest rate for underpayment is updated quarterly. For example, in the third quarter of 2025, the interest rate for individuals is seven percent.

If you have questions about quarterly estimated payments, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.