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Glossary · 1040-ES

What is Estimated Taxes?

Quarterly prepayments of income and self-employment tax made by people without withholding — due in April, June, September and January.

Who pays quarterly

Anyone expecting to owe roughly $1,000+ for the year beyond withholding: freelancers, LLC owners, S-corp shareholders with distribution income, landlords, investors with big gains.

Safe harbors — how to never owe a penalty

  • Pay 90% of this year's tax as you go, or
  • Pay 100% of last year's tax (110% if prior-year AGI topped $150K)

Hit either harbor across the four dates and the underpayment penalty disappears, whatever April brings.

The dates

April 15, June 15, September 15, January 15 — note the uneven gaps; Q2 is only two months long, which is where most people fall behind.

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