LedgerLinx Estimated Tax Payments: Who Needs to Pay and When
January 28, 2026
What Are Estimated Tax Payments?
If you earn income that isn’t subject to withholding — such as self-employment income, rental income, investment income, or freelance earnings — you’re generally required to make quarterly estimated tax payments to the IRS.
The U.S. tax system operates on a “pay-as-you-go” basis. If you don’t have enough tax withheld throughout the year, you may owe an underpayment penalty when you file your return.
Who Needs to Pay?
You generally need to make estimated payments if:
- You expect to owe $1,000 or more in federal tax after subtracting withholding and credits
- Your withholding and credits will be less than the smaller of: 90% of your current year tax, or 100% of your prior year tax (110% if your AGI exceeded $150,000)
Common Situations
- Self-employed individuals (freelancers, sole proprietors, independent contractors)
- Small business owners (LLC, S-Corp, partnership members)
- Rental property owners
- Retirees with pension or investment income not subject to adequate withholding
- Individuals with significant capital gains
Quarterly Due Dates for 2026
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15, 2026 |
| Q2 | Apr 1 – May 31 | June 15, 2026 |
| Q3 | Jun 1 – Aug 31 | September 15, 2026 |
| Q4 | Sep 1 – Dec 31 | January 15, 2027 |
How to Calculate
Use Form 1040-ES to estimate your tax. The basic calculation:
- Estimate your total income for the year
- Subtract estimated deductions and exemptions
- Calculate the tax on the result
- Subtract any expected withholding and credits
- Divide the remaining amount by 4
Safe Harbor Rule
To avoid penalties, you can use the safe harbor method: pay at least 100% of your prior year’s total tax in four equal installments (110% if your AGI was over $150,000).
California State Estimated Taxes
California has its own estimated tax requirements. The due dates differ slightly, and the thresholds are lower — you must pay estimated taxes if you expect to owe $500 or more ($250 if married filing separately).
Payment Methods
- IRS Direct Pay (directpay.irs.gov) — free bank transfer
- EFTPS (Electronic Federal Tax Payment System) — for scheduled payments
- IRS2Go app — mobile payment option
- Check or money order — mail with Form 1040-ES voucher
Proper estimated tax planning can help you avoid surprises and penalties at tax time.