# Quarterly Estimated Taxes

> The IRS gets paid as you earn — four times a year. Form 1040-ES, IRC §6654, and a $1,000 trigger.

Category: self-employment-and-taxes
Updated: 2026-05-26
Canonical: https://everylastmile.app/glossary/quarterly-estimated-taxes

---
**Quarterly estimated taxes** are the four advance payments self-employed people make to the IRS during the year to cover income tax and self-employment tax — because no employer is withholding for them. The authority is **IRC §6654** ("Failure by individual to pay estimated income tax").

**When they are required.** You must make estimated payments if you expect to owe at least **$1,000** in federal tax for the year after subtracting withholding and refundable credits (IRC §6654(e)(1)).

**2026 due dates.**

- **Q1: April 15, 2026** — for income earned January 1–March 31
- **Q2: June 15, 2026** — for April 1–May 31
- **Q3: September 15, 2026** — for June 1–August 31
- **Q4: January 15, 2027** — for September 1–December 31

Payments are remitted on **Form 1040-ES** or electronically via IRS Direct Pay or EFTPS.

**The two safe harbors (IRC §6654(d)).** You avoid the underpayment penalty if your _total_ timely payments (withholding + estimateds) meet _either_:

1. **90% of the current year's tax**, _or_
2. **100% of the prior year's tax** — **110% if your prior-year AGI exceeded $150,000** ($75,000 if MFS) per IRC §6654(d)(1)(C).

The prior-year safe harbor is the cleaner planning target: you can calculate it precisely from last year's Form 1040 line 24.

**The penalty.** Not a flat fine — interest at the federal short-term rate plus 3 percentage points, compounded daily, per quarter the payment was short. For Q1 2026 the IRS rate is 7% (Rev. Rul. 2025-22); Q2 2026 is 6% (Rev. Rul. 2026-5). A $5,000 even shortfall spread across all four quarters accrues approximately **$318** in penalty for the year.

**Worked example.** Tomas nets $30,000 on Schedule C in 2026. His prior-year (2025) total tax was $3,200.

- **Income tax (after standard deduction & half-SE-tax deduction):** ~$1,400
- **SE tax (from earlier glossary entry):** $4,239
- **Total 2026 tax:** ~$5,639

Using the prior-year safe harbor (his 2025 AGI was below $150K, so 100%): pay at least $3,200 evenly across four installments — **$800 each quarter** — to avoid penalty. He can still owe ~$2,400 at filing without penalty.

Using the current-year method: 90% × $5,639 = $5,075 / 4 = ~$1,269 per quarter.

The prior-year safe harbor is cheaper and certain. He pays $800 four times.