Estimated tax.

Estimated tax is the tax you pay directly to the IRS in quarterly installments on income that has no withholding, like self-employment or investment income.

Reviewed by Joseph Citizen, Founder · Last reviewed July 12, 2026

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Estimated tax

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In plain English

Estimated tax is how you pay tax on money that does not come with automatic withholding. An employer withholds tax from a paycheck, but a freelancer, landlord, or investor often receives income with nothing taken out, so the IRS expects them to send in tax four times a year instead. You estimate what you will owe and pay in installments, usually in April, June, September, and January. Underpaying through the year can trigger a penalty, even if you settle up by the filing deadline.

Most useful ages

20 to 70

01Why it matters

If a meaningful share of your income has no withholding, skipping estimated payments can leave you with a surprise bill and a penalty at tax time.

02The math, step by step

A freelancer expects to owe 8,000 dollars in tax this year. Rather than pay it all in April, they send the IRS about 2,000 dollars every quarter.

03What this is NOT

Do not confuse with A once-a-year tax bill

Estimated tax is NOT something you settle only at filing time. The IRS expects the payments spread across four quarterly deadlines, and paying late can cost a penalty even if your total is right.