If you invoice clients instead of receiving a W-2, quarterly estimated taxes are how the IRS expects you to pay income tax and self-employment tax during the year.
Employees have tax withheld each paycheck. Freelancers usually do not, so you send estimates (often called 1040-ES payments) four times a year. This guide explains who pays, typical due dates, and how to size a payment. It is not tax advice. Start with the IRS estimated taxes page and Form 1040-ES.
What quarterly estimated taxes are
Estimated tax is a payment toward the tax you will owe on your annual return. For freelancers that usually includes:
- Federal income tax on net profit
- Self-employment tax (Social Security and Medicare) — see the self-employment tax calculator guide
State estimates may also apply. Rules differ by state; this article covers federal estimates only.
Who has to pay
The IRS generally requires estimated tax if you expect to owe at least $1,000 when you file, after withholding and refundable credits. There are exceptions (for example, certain withholding situations). Read the current IRS page rather than relying on a memory of last year’s threshold.
Side-hustle W-2 employees sometimes still owe estimates on the freelance slice if withholding on the job is not high enough. When in doubt, ask a CPA before you skip a quarter.
Due dates
| Period (typical) | Federal due date (typical) |
|---|---|
| Income Jan 1 – Mar 31 | April 15 |
| Income Apr 1 – May 31 | June 15 |
| Income Jun 1 – Aug 31 | September 15 |
| Income Sep 1 – Dec 31 | January 15 of the next year |
If a date falls on a Saturday, Sunday, or legal holiday, it usually moves to the next business day. Always use the calendar printed on that year’s Form 1040-ES. The January payment can sometimes be skipped if you file and pay in full by the January extension described in the form instructions — confirm before you rely on that.
How to calculate a payment
- Estimate annual revenue from invoices you expect to collect — not just invoices you sent.
- Subtract deductible expenses you actually track. See freelance expense tracking.
- Estimate SE tax and income tax on that net. Round’s tax estimator is a planning tool, not a filing engine.
- Divide by four if income is steady, or annualize if Q1 was slow and Q4 will be huge (IRS annualized installment method).
- Consider safe harbor using last year’s tax if this year is unpredictable. Details live in IRS Publication 505.
Cashflow beat perfection
Set aside a percentage of every paid invoice in a separate savings account the day it lands. Adjust the percentage after two quarters of real numbers. Waiting until March to “see how it goes” is how estimated-tax penalties happen.
How to pay the IRS
Most people pay electronically with IRS Direct Pay, EFTPS, or the IRS2Go app. Keep the confirmation. Label the payment as an estimated tax payment for the correct tax year. Instructions are on IRS payments.
Round does not file taxes or send money to the IRS. It helps you see profit from invoices and expenses so the estimate is not a guess, then you (or your CPA) pay and file.