If you freelance or run a side business, the IRS wants its cut four times a year. Here's how to figure out what to pay — and how to never be surprised again.
When you're a W-2 employee, taxes come out of every paycheck automatically. The moment you start earning 1099 income, that job becomes yours — and the IRS expects you to pay as you go, in four installments, rather than one lump sum in April.
Who actually has to pay
If you expect to owe at least $1,000 in tax for the year after withholding, you generally need to make estimated payments. That covers most freelancers, contractors, and single-member LLC owners.
How to estimate the amount
Two taxes are in play: self-employment tax (15.3% on most of your net profit, covering Social Security and Medicare) and ordinary income tax at your bracket. A simple safe-harbor rule is to set aside 25–30% of your net profit, but our quarterly calculator does the real math for you.
- Q1 covers Jan–Mar, due mid-April
- Q2 covers Apr–May, due mid-June
- Q3 covers Jun–Aug, due mid-September
- Q4 covers Sep–Dec, due mid-January
The safe-harbor shortcut
Pay either 90% of this year's tax or 100% of last year's (110% if you're a higher earner) and the IRS won't charge an underpayment penalty — even if you owe more at filing. It's the simplest way to stay protected when your income is unpredictable.
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