Do I Need to Pay Quarterly Estimated Taxes for My Business?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

If you expect to owe at least $1,000 in federal tax for the year after withholding and credits, the Internal Revenue Service (IRS) generally expects you to pay during the year through estimated tax payments. For most people the four due dates are April 15, June 15, September 15, and January 15 of the next year. You can pay through your IRS online account, IRS Direct Pay, or the Electronic Federal Tax Payment System (EFTPS).

What this means

Employees have tax taken out of each paycheck. Business owners usually don’t, so the IRS asks them to pay through the year instead.

The IRS says individuals generally must make estimated payments if both are true:

You expect to owe at least $1,000 after subtracting withholding and refundable credits, and
Your withholding and credits will be less than the smaller of 90 percent of this year’s tax or 100 percent of last year’s tax. That second number is 110 percent if last year’s adjusted gross income (AGI) was over $150,000, or $75,000 if married filing separately.

Payments cover income tax and, for many owners, self-employment tax.

Due dates for a calendar year, according to the IRS:

Income earned	Payment due
January 1 to March 31	April 15
April 1 to May 31	June 15
June 1 to August 31	September 15
September 1 to December 31	January 15 of the next year

If a date falls on a weekend or legal holiday, it moves to the next business day.

Who pays depends on your setup. Sole proprietors, partners, and LLC members taxed as partners pay on their own returns using Form 1040-ES. Partnerships don’t pay estimated income tax for their partners. C corporations and some S corporation taxes have separate estimated tax rules, so ask your CPA.

Made-up example: Jordan runs Tidewater Mobile Detailing as a single-member LLC. Last year his total tax was $8,000. To stay safe this year, his CPA suggests paying at least $2,000 each quarter, which adds up to 100 percent of last year’s tax. Jordan moves part of every customer payment into a separate tax savings account, so the $2,000 is ready each time a due date comes.

Why it matters

Penalties. The IRS can charge an underpayment penalty if you pay too little or too late.
Cash shock. One big bill at tax time can sink a small business.
State taxes, too. Many states with an income tax also expect estimated payments.

Who this applies to

Most owners of profitable sole proprietorships, partnerships, and LLCs. S corporation owners who take enough salary through payroll may have most of their tax withheld, but often still need estimates on profit. New businesses with little profit may not owe enough to need them. Your state may have its own estimated tax rules and dates, so check with your state tax department (see 10.2.1 State Income Tax).

How to do it

Estimate your profit for the year from your books (see 10.5.8 Financial Reports).
Figure your expected tax using the Form 1040-ES worksheet or with your CPA.
Pick a safe target. Many owners aim for 100 percent of last year’s tax, or 110 percent if that applies, so they’re covered even if this year is better.
Divide by four and put the dates on your calendar (see 10.9.1 Financial Calendar).
Save as you earn. Move a set share of each deposit into a tax reserve account (see 10.4.2 Tax Reserve Account).
Pay online. Use your IRS online account, Direct Pay, or EFTPS. Save the confirmation.
Adjust midyear if profit changes a lot.
Do the same for your state if it has an income tax.
Report payments on your annual return. The IRS says they go on Form 1040.

What proof to keep

Payment confirmations for each quarter
Your estimate worksheet or your CPA’s calculation
Bank records showing the payment
Your tax reserve account statements

Keep these with that year’s tax records.

Common mistakes

Skipping the first year. New owners often learn about estimates from a penalty notice.
Forgetting the January payment. It’s for the prior year’s last months.
Spending the tax money. Keep it in a separate account.
Only paying federal. Many states want estimates too.
Paying on a look-alike site. Use IRS.gov tools only.
Ignoring big changes. A great quarter can mean you need to pay more.

When to get help from a pro

CPA or enrolled agent: to set your targets and adjust during the year. Questions to ask:

What should my quarterly payments be this year?
Should I use last year’s tax or this year’s estimate as my target?
What do I owe my state, and when?

Bill’s note

[Bill: add a short note. For example, how you set aside money for SiteSmarty’s estimated taxes, or a client who was surprised by a penalty in their first year.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: how I figure and pay SiteSmarty’s estimated taxes]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: a payment confirmation]
[Result so far:]

Questions people ask

Do I have to pay estimated taxes? Generally yes, if you expect to owe at least $1,000 after withholding and credits and your withholding won’t cover the IRS minimum.

When are payments due? April 15, June 15, September 15, and January 15 of the next year for most calendar year filers. Weekend and holiday dates move to the next business day.

How much should I pay? Many owners pay enough to cover 100 percent of last year’s tax, or 110 percent if last year’s AGI was over $150,000. Your CPA can help you choose.

What if I don’t pay? The IRS can charge an underpayment penalty.

How do I pay? Through your IRS online account, IRS Direct Pay, EFTPS, or other IRS.gov options.

Audit check

Question: Does the business owner make timely estimated tax payments when required, with confirmations on file?
Pass looks like: Quarterly dates on the calendar. A tax reserve account. Payments made on time through IRS tools. State estimates handled. Confirmations saved.
Fail looks like: No estimates. Penalty notices. Tax money spent. State estimates missed.
Evidence to collect: Payment confirmations, estimate worksheets, tax reserve account statements, and any IRS notices.

Where this fits

Do this first: 10.1.2 Federal Tax Classification, 10.1.4 Accounting Method

Do this next: 10.1.6 Federal Filings

Sources

IRS, "Estimated tax" FAQs (checked October 17, 2026)
IRS, 2026 Form 1040-ES (checked October 17, 2026)
IRS, Publication 505 (2026), "Tax Withholding and Estimated Tax" (checked October 17, 2026)
IRS, Publication 509 (2026), "Tax Calendars" (checked October 17, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.