If you're self-employed, understanding quarterly tax payments is crucial for avoiding penalties and managing your cash flow effectively.
What Are Quarterly Tax Payments?
Quarterly estimated tax payments are how self-employed individuals pay taxes on income that isn't subject to withholding. These payments are due four times a year.
When Are They Due?
Quarterly payments are typically due on:
- April 15 (Q1: Jan-Mar)
- June 15 (Q2: Apr-May)
- September 15 (Q3: Jun-Aug)
- January 15 (Q4: Sep-Dec)
How to Calculate Your Payments
Estimate your annual income and calculate your expected tax liability. Divide this by four to determine your quarterly payment amount.
Why They Matter
Failing to make quarterly payments can result in penalties and interest charges. Staying current helps you avoid these fees and manage your tax burden throughout the year.