Estimated tax for US freelancers: quarterly deadlines that matter

US freelancers do not have an employer withholding tax from each paycheck. The IRS still wants their share throughout the year. That is what estimated tax is for. You pay quarterly. Miss a deadline, and you face underpayment penalties plus interest. Get it right, and tax season becomes a formality.

The four deadlines

• Q1: 15 April (income 1 Jan to 31 March)
• Q2: 15 June (income 1 April to 31 May)
• Q3: 15 September (income 1 June to 31 August)
• Q4: 15 January of the following year (income 1 Sept to 31 Dec)

If the 15th falls on a weekend or holiday, the deadline moves to the next business day. The IRS publishes the exact dates each year.

How much to pay

You need to pay at least 90% of your current year tax liability, or 100% of last year's tax (110% if your income is over $150,000). The safe harbour is using last year's number: if you paid $10,000 in tax last year, pay $2,500 per quarter this year. You settle any difference when you file your annual return.

How to pay

Use the IRS Direct Pay system or EFTPS. Both are free. You need your SSN or EIN, and you select 'estimated tax' as the payment type. Form 1040-ES has vouchers, but most people pay online and skip the paper.

“I set aside 30% from every invoice. Pay quarterly from that pot. Never had a surprise bill or penalty.”

- r/freelance

State estimated tax

Many states require quarterly estimated tax too. California, New York, and Texas (no income tax) are the big three for freelancers. Check your state's rules. Some mirror the federal schedule; others have different dates. Missing state deadlines can trigger separate penalties.