Quarterly Tax Estimator

How Quarterly Estimated Taxes Work

Self-employed individuals, freelancers, and independent contractors must pay estimated taxes quarterly because they do not have an employer withholding taxes from their paycheck. The IRS requires you to pay estimated taxes if you expect to owe $1,000 or more when you file your return. Quarterly payments cover both income tax and self-employment tax (Social Security and Medicare). The four quarterly due dates are April 15, June 15, September 15, and January 15 of the following year. Missing these deadlines can result in underpayment penalties, so it is important to calculate and pay on time.

Self-Employment Tax Explained

Self-employment tax covers Social Security (12.4%) and Medicare (2.9%) contributions. As an employee, you only pay half — your employer pays the other half. When self-employed, you pay both halves for a combined rate of 15.3%. However, you can deduct the employer-equivalent portion (7.65%) from your adjusted gross income, which reduces your income tax. Self-employment tax applies to 92.35% of your net self-employment earnings. For 2025-2026, the Social Security tax applies to the first $168,600 in earnings, while the Medicare tax applies to all earnings with an additional 0.9% surtax on income above $200,000 for single filers.

Deductions That Reduce Your Quarterly Payments

Common self-employment deductions include home office expenses, health insurance premiums, business equipment, software subscriptions, vehicle expenses, professional development, and retirement contributions to a SEP-IRA or Solo 401(k). The qualified business income (QBI) deduction allows many self-employed individuals to deduct up to 20% of their qualified business income. Track every business expense throughout the year — even small deductions add up to significant tax savings. Using a separate business bank account and accounting software makes tracking expenses much easier when quarterly payment time arrives.