Quarterly estimated taxes for self-employed people
If you have freelance income, side gig revenue, or investment gains, you may need to pay taxes four times a year — not once. Here's the basic structure.
Written for plain-English understanding by Joseph Citizen. Why I built this →
If you're a W-2 employee, your employer withholds taxes from every paycheck. If you have substantial income that isn't withheld — freelance work, business income, investment gains — the IRS expects you to pay estimated taxes throughout the year, or you'll owe penalties at tax time.
Who needs to pay quarterly
You generally need to pay estimated taxes if you expect to owe at least $1,000 when you file. This includes self-employed people, gig workers, contractors, and anyone with significant non-W-2 income.
When they're due
Roughly four times a year: April 15, June 15, September 15, and January 15. The dates are calendar-based, not three months apart — June and September come up faster than people expect.
How much to pay
Two safe-harbor methods to avoid penalties:
- Pay 100% of last year's total tax (110% if you earned over $150K)
- Pay 90% of this year's actual tax
The first one is easier — look at last year's tax bill, divide by 4, pay that each quarter. Even if you make more this year, you won't owe penalties.
🎉 You finished Taxes Made Simple.
That's the whole course. Pick another path below or test what you've learned.
See all 7 courses →
Pick another structured path through finance basics.
Going deeper? Premium turns reading into mastery — AI tutor, exams, certificates.
Ask a question about this lesson.
Real reader questions decide what gets covered next. Every question gets read personally. Many become future lessons, glossary entries, or Market Pulse posts.
Important
This lesson is general financial education only. It is not personal investment, tax, accounting, or legal advice. Examples are illustrative. Past performance does not guarantee future results.