A simple guide for small business owners and side hustlers to stay compliant and stress-free
If you’re self-employed, own a small business, or earn income outside of a traditional W-2 job, there’s a high chance the IRS expects you to pay quarterly estimated taxes.
But most new business owners either don’t know this or don’t know where to start. That’s why quarterly taxes are one of the biggest (and most avoidable) financial stressors in business.
Here’s what you need to know to understand, calculate, and pay your quarterly taxes on time — without the overwhelm.
What Are Quarterly Taxes?
Quarterly taxes are payments you make to the IRS four times a year to cover your estimated federal income tax and self-employment tax. Because no one is withholding taxes from your business income, you’re required to prepay your share as you go.
If you wait until the end of the year, you could face penalties and interest — even if you pay your full balance at tax time.
Who Needs to Pay Quarterly Taxes?
The general rule: if you expect to owe at least $1,000 in taxes for the year (after deductions and credits), you’re required to make estimated payments.
This applies to:
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Sole proprietors
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Single-member LLCs
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Partnerships
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S Corp owners who take distributions
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Freelancers, consultants, and gig workers
If you have a W-2 job and a business, your side income may still trigger the quarterly tax requirement.
When Are Quarterly Taxes Due?
Quarterly tax payments are typically due on:
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April 15
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June 15
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September 15
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January 15 (of the following year)
If the 15th falls on a weekend or holiday, the due date shifts to the next business day. Mark your calendar and set reminders — late payments may result in IRS penalties.
How Do You Calculate Quarterly Taxes?
You can calculate quarterly taxes one of two ways:
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Safe Harbor Method:
Base your payments on last year’s total tax bill. As long as you pay 100% (or 110% if your income was over $150K) of last year’s tax, you’ll avoid penalties — even if your income increases this year. -
Actual Income Method:
Estimate your current year’s income and expenses, then divide your expected tax by four. This is more accurate if your income is fluctuating or growing fast, but also more complex.
Use IRS Form 1040-ES to calculate your estimate, or work with a tax pro or bookkeeper to run the numbers.
Where and How Do You Pay?
You can pay federal estimated taxes online through the IRS Direct Pay portal or the Electronic Federal Tax Payment System (EFTPS). You can also mail a check with Form 1040-ES, but online is faster and more reliable.
Some states also require quarterly payments for state income tax. Check your state’s department of revenue for details.
How Much Should You Set Aside?
A good starting point is to set aside 25–30% of your net business income (after expenses) into a dedicated Tax Account as you get paid. That way, when quarterly payments are due, the money is already there.
Inside The Small Business Planner, we walk you through how to calculate your estimated taxes, set up your bank accounts, and build a rhythm for staying tax-ready all year long.
Final Takeaway
Quarterly taxes aren’t just for the IRS — they’re for your peace of mind. When you plan ahead and stay consistent, tax season becomes just another part of your business routine.
The Small Business Planner gives you the tools to set up your accounts, track your income, and calculate your tax savings so you can pay yourself and the IRS — with no surprises.
Explore The Small Business Planner now → https://smallbusinessplanner.com/products/planner