Employees usually have tax withheld from paychecks. Self-employed people generally do not, so they may need to pay the IRS throughout the year rather than waiting until April.
1. Who may need estimated tax payments?
Individuals generally may need estimated payments if they expect to owe at least $1,000 in federal tax after withholding and refundable credits, and their withholding and credits are not enough under the applicable safe-harbor rules. Some people who also have a W-2 job can increase payroll withholding instead.
Estimated payments cover income tax and self-employment tax, where applicable. They are not four separate income tax returns.
2. When are payments due?
| Income period | Usual federal deadline |
|---|---|
| January 1–March 31 | April 15 |
| April 1–May 31 | June 15 |
| June 1–August 31 | September 15 |
| September 1–December 31 | January 15 of the following year |
Weekends or legal holidays can shift deadlines. The IRS periods are not four equal calendar quarters.
3. How much should I send?
A simplified illustration: projected federal tax of $8,000, no payroll withholding and an equal-payment method could mean $2,000 per installment. Actual required payments may differ based on the prior-year tax safe harbor, income changes, withholding, credits, and higher-income rules. Some seasonal businesses may use the annualized-income installment method.
Use IRS Direct Pay, selecting the correct estimated tax reason and tax year. Keep each payment confirmation.
4. Washington State: a different system
Washington has no regular state individual income tax, but businesses may need to file Washington Business & Occupation (B&O) and other applicable excise taxes. B&O generally starts with gross business receipts, not net Schedule C profit. The Department of Revenue assigns monthly, quarterly, or annual filing frequency. A required return can be due even if the calculation results in no tax owed.
Federal estimated payments and Washington DOR reporting are completely separate. See Washington DOR — B&O Tax.
5. Common mistakes and misunderstandings
- “Quarterly means every three months.” IRS periods and deadlines are uneven.
- “My LLC pays my personal estimated tax for me.” A sole proprietor's federal estimates are generally associated with the individual's Form 1040.
- “I only owe tax if I withdraw money from the business.” Tax generally follows business profit, not owner draws.
- “I can pay all my tax next April without penalty.” Underpayment penalties can apply even when the balance is eventually paid.
- “Washington B&O replaces federal taxes.” They are distinct obligations.
6. Before your tax appointment
Bring last year's completed return, year-to-date profit estimate, W-2 withholding, any previous estimated payments (with dates and amounts), and Washington DOR filing information. Your preparer can determine whether and how much to pay.
Official references: IRS estimated tax FAQ · IRS Publication 505.