Quarterly tax payments can save you from IRS penalties. Learn who needs to pay, how to calculate, and smart ways to stay compliant.
Should You Be Making Quarterly Tax Payments?
Do you wait until April to deal with taxes? If you’re self-employed or earning income without tax withholding, that delay could cost you big time.
Quarterly tax payments are the IRS’s way of saying, “Pay as you go, or pay a penalty.” If you’re self-employed, receive rental income, or get paid from gigs, this guide will help you understand exactly what to do, when to do it, and how to avoid trouble.
Let’s break down everything you need to know so you can stay ahead of your taxes—and avoid any nasty surprises!
What Are Quarterly Tax Payments?
Quarterly tax payments are estimated taxes you pay every three months to the IRS. These cover income not subject to automatic withholding, like freelance work or capital gains.
They’re basically mini tax returns spread across the year. The IRS doesn’t want to wait until April to get paid—they want their share as you earn it.
Here’s when they’re due:
- April 15
- June 15
- September 15
- January 15 (of the following year)
If the date falls on a weekend or holiday? You get until the next business day.
Missing payments can lead to penalties, even if you pay in full later. That’s why it’s important to plan ahead.
Who Needs to Make Quarterly Payments?
Quarterly tax payments aren’t just for full-time freelancers. Anyone whose income isn’t fully taxed at the source might need to pay them.
You likely need to pay quarterly taxes if you:
- Are self-employed
- Have significant investment income
- Sell real estate for profit
- Withdraw from traditional retirement accounts
- Earn Social Security above a certain threshold
- Have stock options or restricted stock units (RSUs)
- Earn rental, royalty, or freelance income
General Rule: If you expect to owe $1,000 or more in taxes, the IRS expects you to make estimated payments.
Self-Employed? This Is Non-Negotiable
Self-employed workers, freelancers, consultants, gig economy workers—this one’s for you.
When you’re self-employed:
- No one’s withholding taxes from your income
- You pay income and self-employment tax (15.3% total)
- You’re both the employer and the employee
Quick Tip: You’ll receive a 1099-NEC instead of a W-2. That’s a big red flag to the IRS that you’re responsible for your own taxes.
Common Types of Self-Employment Work:
- Freelance writing or design
- Consulting
- Rideshare driving (Uber, Lyft)
- Online selling (Etsy, Amazon)
- Contract programming
Table: Self-Employed Tax Breakdown
| Income Type | Federal Tax Withheld? | Estimated Tax Required? |
|---|---|---|
| W-2 Job | Yes | No |
| Freelance Income | No | Yes |
| IRA Withdrawal | Optional | Sometimes |
| Social Security | Optional | Maybe |
Capital Gains Can Trigger Quarterly Taxes
Did you sell stocks, real estate, or other assets at a profit? If so, welcome to the world of capital gains.
You owe tax on those profits—unless you offset them with capital losses. But even then, you might owe estimated taxes.
Common Capital Gain Scenarios:
- Selling a vacation home
- Flipping houses
- Selling stocks or mutual funds
Big gains? Better to send a chunk to the IRS now than be hit with a penalty later.
Withdrawing from Retirement Accounts
Taking money out of your IRA or 401(k)? That counts as income—and may require quarterly payments.
You have two choices:
- Ask your provider to withhold taxes.
- Make estimated tax payments yourself.
Many people forget this step and get blindsided come April. Always plan ahead.
Bonus Tip: Withholding from IRAs is voluntary. You can ask them to withhold more if needed.
Your Social Security May Be Taxed Too
Think Social Security income is always tax-free? Think again.
If your combined income is over certain limits, you may owe tax on your benefits:
- Single: $25,000+
- Married: $32,000+
Combined income = AGI + nontaxable interest + ½ Social Security benefits
You can:
- Have taxes withheld from Social Security checks
- Or pay quarterly estimated taxes
Don’t let this sneak up on you!
RSUs and Stock Options: Hidden Tax Traps
If you receive stock as part of your job—whether RSUs or stock options—you might get taxed when they vest or when you exercise them.
Default tax withholding on RSUs is usually 22% (or 37% if over $1M). But if your effective tax rate is higher, you will owe more.
That’s where quarterly payments can fill the gap and save you from underpayment penalties.
Table: Stock Income Tax Scenarios
| Stock Event | Withholding Rate | May Need Quarterly? |
| RSU Vesting | 22% / 37% | Yes |
| Stock Option Exercise | Varies | Yes |
Earning Passive Income? Don’t Forget the IRS
Getting paid from real estate, royalties, or bonuses? These often skip traditional withholding.
Even if the income feels passive, the taxes are very active. You’ll need to either:
- Send quarterly payments
- Or bump up withholding from other income
Examples:
- Airbnb rental income
- Licensing music or creative works
- Receiving large year-end bonuses
️ When Are Quarterly Taxes Due?
Quarterly taxes aren’t split evenly. The IRS sets uneven deadlines:
| Payment Period | Due Date |
| Jan 1 – Mar 31 | April 15 |
| Apr 1 – May 31 | June 15 |
| Jun 1 – Aug 31 | September 15 |
| Sep 1 – Dec 31 | January 15 |
Tip: Mark your calendar early and don’t wait until the last minute.
How Much Should You Pay?
Quarterly payments don’t have to be exact. But they need to be close to avoid penalties.
To avoid an underpayment penalty:
- Pay 100% of last year’s tax (110% if AGI > $150K)
- Or 90% of your current year’s tax
You can use:
- IRS Publication 505 worksheet
- IRS Interactive Tax Assistant online
And don’t forget self-employment tax! That adds 15.3% (12.4% for Social Security and 2.9% for Medicare).
How to Make Quarterly Payments
Making payments is simple. You can:
- Mail a check with Form 1040-ES voucher
- Pay online at IRS.gov/Payments
- Use EFTPS, the IRS’s electronic payment system
States may have their own quarterly rules. Check your state’s revenue website to be sure.
Should You Just Increase Withholding Instead?
If you or your spouse has a regular job, you might avoid quarterly taxes by adjusting your W-4.
You can:
- Submit a new W-4 to your employer
- Request withholding from Social Security or IRA withdrawals
- File IRS Form W-4V to withhold from unemployment benefits
Why it helps: IRS treats withheld tax as paid evenly throughout the year, helping you avoid penalties.
✅ Conclusion: Stay Ahead to Stay Out of Trouble
If you earn money without automatic tax withholding, quarterly payments aren’t optional—they’re essential.
Understanding the deadlines, calculating what you owe, and choosing how to pay (or withhold) gives you control over your tax future.
Avoid the April panic. Set reminders, plan quarterly, and treat your taxes like a subscription—you pay as you go.
❓ FAQs
Who needs to make quarterly tax payments in 2025?
Anyone who expects to owe over $1,000 in federal taxes without enough withholding must make estimated payments.
How do self-employed people pay quarterly taxes?
They can mail Form 1040-ES vouchers or pay online via the IRS website. Payments are due every quarter.
Can I avoid quarterly payments by increasing withholding?
Yes, you can adjust your paycheck or IRA/Social Security withholding to cover your tax liability instead.
What happens if I miss a quarterly tax deadline?
You may owe a penalty and interest. Even if you pay later, the IRS charges for the late payment.
Do states require quarterly tax payments too?
Most states with income tax follow similar rules as the IRS. Check with your state’s tax department.
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