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Posted by Dennis Jao

What Are Quarterly Taxes?

What Are Quarterly Taxes?

Quarterly taxes refer to the estimated tax payments that self-employed individuals and business owners are required to make to the Internal Revenue Service (IRS) on a quarterly basis. These payments are intended to cover income and self-employment taxes, as well as any other taxes that may be owed, such as state and local taxes.

Who needs to pay quarterly taxes?

Individuals and businesses that expect to owe at least $1,000 in taxes at the end of the year are typically required to make quarterly estimated tax payments. This includes self-employed individuals, freelancers, and independent contractors who receive income that is not subject to withholding. 

In addition, individuals who receive income from sources that are not subject to withholding, such as rental income, investment income, and alimony, may also need to make quarterly estimated tax payments. 

When are quarterly tax payments due?

Quarterly tax payments are due on the following dates: 

  • April 15

  • June 15

  • September 15

  • January 15 (of the following year)

If the due date falls on a weekend or a federal holiday, the payment is due on the next business day. 

It is important to note that the quarterly tax payments are not evenly divided throughout the year. The first and second quarter payments are each due on April 15 and June 15, respectively. The third quarter payment is due on September 15, while the fourth quarter payment is due on January 15 of the following year.


How are quarterly tax payments calculated?

Quarterly tax payments are calculated based on the taxpayer's estimated income and deductions for the year. The IRS provides a worksheet to help taxpayers calculate their estimated tax liability, which takes into account factors such as taxable income, deductions, credits, and other tax liabilities. 

The estimated tax payments should be equal to the lesser of either 90% of the current year's tax liability or 100% of the prior year's tax liability (110% for high-income taxpayers). If the estimated tax payments are less than the required amount, the taxpayer may be subject to penalties and interest on the underpaid amount. 

How are quarterly tax payments made?

Quarterly tax payments can be made electronically or by mail. The IRS accepts electronic payments through the Electronic Federal Tax Payment System (EFTPS) or through IRS Direct Pay. Taxpayers can also pay by credit or debit card, although third-party fees may apply. 

If the taxpayer prefers to pay by mail, they can use the estimated tax payment voucher (Form 1040-ES) provided by the IRS. The voucher includes the payment amount, due date, and the taxpayer's name, address, and social security number.


What are the penalties for not paying quarterly taxes?

If a taxpayer fails to make quarterly estimated tax payments, they may be subject to penalties and interest on the underpaid amount. The penalty is calculated based on the underpayment amount, the underpayment period's length, and the applicable interest rate. 

Taxpayers need to make timely and accurate quarterly tax payments to avoid penalties and interest on underpaid taxes. Taxpayers who are unable to make timely payments should contact the IRS to discuss payment options and potential penalty relief programs.



Quarterly tax payments can be a complex and confusing process for self-employed individuals and business owners. It is important to understand the requirements for making estimated tax payments, including when payments are due, how they are calculated, and how to make payments. 

Taxpayers should consult with a tax professional to ensure they make accurate and timely quarterly tax payments and explore potential tax planning opportunities. With the right guidance and expertise, taxpayers can avoid penalties and interest on underpaid taxes and stay compliant with IRS tax laws and regulations.



Dennis Jao
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