Quarterly taxes aren't exciting, but neither is getting surprised by a massive tax bill in April. If you're making money in a business and taxes aren't being withheld from that income, you need a plan for paying the IRS throughout the year. Here's how estimated taxes work, when they're due, and how to keep them from becoming an expensive problem.
What Are Quarterly Taxes for Small Business Owners?
Quarterly taxes, more accurately called estimated tax payments, are payments you make toward your federal tax liability throughout the year. The federal income tax system is pay-as-you-go. The IRS doesn't necessarily want you waiting until you file your return to pay everything you owe.
This commonly affects self-employed individuals, sole proprietors, partners, LLC owners, and S corporation shareholders who receive income that isn't adequately covered by withholding. Generally, individuals need to make estimated tax payments if they expect to owe at least $1,000 after subtracting withholding and refundable credits and they don't meet one of the applicable safe-harbor thresholds. Corporations generally use a $500 threshold.
Here's what I want you to remember: Making money is good. Getting to April and realizing you spent the IRS's portion of it is not.
Do LLCs Pay Quarterly Taxes?
This question comes up all the time, and the answer depends on how your LLC is taxed.
A single-member LLC taxed by default as a sole proprietorship generally reports its business activity on Schedule C. The owner may need to make estimated payments covering income tax and self-employment tax.
A multi-member LLC taxed as a partnership generally doesn't pay federal income tax at the entity level. Instead, income passes through to the partners, and the partners may need to make estimated tax payments personally.
An LLC taxed as an S corporation works differently. The owner may receive wages through payroll, where taxes are withheld, but may still need estimated payments depending on the rest of their income and withholding.
A C corporation is different again because the corporation itself is a separate federal taxpayer and may have its own estimated tax requirements.
Don't assume that forming an LLC somehow answers the quarterly-tax question. Your tax classification, income, withholding, and overall tax situation determine what needs to be paid and by whom.
How Do I Calculate My Quarterly Taxes?
This is where I don't want you just throwing a number at the IRS and hoping for the best.
Start by estimating your income for the year, then account for your expected deductions, credits, income taxes, self-employment taxes, and other applicable taxes. Form 1040-ES provides a worksheet for calculating estimated payments, and your prior-year tax return can provide a useful starting point. But there's another concept every business owner should understand: the safe harbor.
Generally, you can avoid an estimated-tax underpayment penalty by paying enough through withholding and timely estimated payments to cover at least 90% of your current-year tax or 100% of your prior-year tax, whichever is less. For certain higher-income taxpayers, the prior-year threshold increases to 110%.
That's why blindly dividing a tax estimate by four isn't always the best strategy. Income changes. Businesses grow. You might have a huge quarter followed by a slow one. You might sell an investment or make a major purchase.
Your estimates can and should be revisited as the year changes.
When Are Quarterly Tax Payments Due in 2026?
For the 2026 tax year, the federal estimated tax payment deadlines are:
- First payment: April 15, 2026
- Second payment: June 15, 2026
- Third payment: September 15, 2026
- Fourth payment: January 15, 2027
If a due date falls on a weekend or legal holiday, the deadline generally moves to the next business day.
And notice something weird? They're called "quarterly" payments, but those dates aren't spaced into four equal three-month quarters. Don't assume you can just pay every three months from April and call it good. Put the actual IRS deadlines on your calendar.
What Happens If I Miss a Quarterly Tax Payment?
If you don't pay enough tax by the applicable deadlines, the IRS may assess an underpayment of estimated tax penalty.
And here's something business owners sometimes misunderstand: catching up later doesn't necessarily erase an earlier underpayment. The IRS calculates the penalty separately for each required installment, so you could potentially owe an underpayment penalty even if you later catch up or ultimately receive a refund.
If you missed a payment, don't ignore it. Get caught up, recalculate where you stand, and determine what needs to happen for the remaining payment periods. Ignoring a tax problem has never been a tax strategy.
Do Sole Proprietors Have to Pay Quarterly Taxes?
In many cases, yes. If you're a freelancer, consultant, independent contractor, gig worker, or other sole proprietor and nobody is withholding taxes from your business income, estimated payments may be how you satisfy your federal tax obligations throughout the year.
But remember that the $1,000 rule isn't the entire test. Whether estimated payments are required also depends on your withholding, refundable credits, and the safe-harbor rules discussed above.
Also, don't forget about self-employment tax. Your estimated payments can cover both federal income tax and self-employment tax.
Can I Avoid Quarterly Payments by Increasing My Withholding?
Possibly, and this can be a great strategy for some business owners. If you or your spouse also receive W-2 wages, you may be able to increase withholding from those wages rather than relying entirely on separate estimated payments. The IRS specifically recognizes additional wage withholding as a way taxpayers may avoid needing estimated payments.
This is exactly why I don't like blanket advice telling every entrepreneur to simply "send the IRS a check every quarter." Look at the entire tax picture first.
How Can I Reduce My Quarterly Tax Burden?
Here's where we need to separate paying your taxes from planning your taxes.
Quarterly payments don't magically reduce your tax bill. They're simply prepayments toward what you're expected to owe. If you want to actually reduce the tax liability, that's where proactive tax planning comes into play.
Make sure you're tracking and claiming legitimate business deductions. Look at retirement-plan opportunities. Keep accurate mileage and expense records. Evaluate whether your current entity and tax classification still make sense as your business grows. If an S corporation election could be appropriate, analyze it rather than blindly making the election because somebody on social media told you every LLC should be an S corp. And most importantly, do this during the year.
December is better than April. July is better than December. The earlier you know where your income is headed, the more options you generally have to make strategic decisions before the year is over.
The Bottom Line
Quarterly taxes shouldn't be a quarterly surprise. Know what you're earning, understand what you may owe, set the money aside, revisit your projections during the year, and make your payments on time. If every tax deadline turns into a scramble to figure out how much cash you can find, something in the system needs to change.
And if you're consistently writing big checks to the IRS without knowing whether you're using the right entity, capturing every legitimate deduction, or actually implementing a tax strategy, stop guessing. Book a Comprehensive Tax and Business Consultation with my team at KKOS Lawyers. We'll look at your business, entity structure, income, and tax strategy to identify where you're unnecessarily losing money and what you can still do about it. You have to pay what you legally owe. You do not have to volunteer to pay a freaking dollar more.
.png?width=6440&height=1438&name=KKOS%20Book%20a%20Call%20(2).png)
Frequently Asked Questions
Can I make estimated tax payments more often than quarterly?
Yes. You don't have to wait for the quarterly deadlines. You can make payments more frequently throughout the year as long as you've paid enough by each applicable deadline. Some business owners prefer making monthly payments because it makes cash flow easier to manage.
Do I have to pay quarterly taxes to my state too?
Possibly. Many states have their own estimated income tax requirements and deadlines. Your federal estimated payments don't cover what you may owe at the state level, so make sure you're planning for both.
Can I pay all of my estimated taxes at once?
Yes, you can pay your full estimated tax amount earlier in the year. What you generally can't do is wait until the end of the year to make up for earlier required installments without potentially triggering an underpayment penalty.
What if my business income changes during the year?
Recalculate your estimated taxes. If business takes off, you may need to increase future payments. If income drops significantly, you may be able to reduce them. Don't keep blindly paying an estimate based on numbers that are no longer accurate.
What if my business income is seasonal?
If your income is uneven throughout the year, the annualized income installment method may allow your required estimated payments to better reflect when you actually earned the income. This can be particularly useful for seasonal businesses.
Are quarterly tax payments a business deduction?
No. Federal income tax payments are not a deductible business expense. Estimated payments are simply prepayments toward your anticipated tax liability.
Does an S corporation eliminate the need for quarterly taxes?
No. An S corporation owner may have federal taxes withheld through payroll, but estimated payments could still be necessary depending on distributions, other income, deductions, credits, and the amount already being withheld.
What is the easiest way to avoid forgetting quarterly tax deadlines?
Build them into your business calendar and set aside tax money as you earn it. The IRS deadlines shouldn't come as a surprise four times a year.
