If you freelance or run a side hustle in the US, nobody withholds tax from your income. That is why the IRS expects quarterly estimated taxes. Missing them can lead to penalties and a big surprise bill in April.
Who needs to pay?
Generally, you must make estimated payments if you expect to owe $1,000 or more in federal tax for the year after subtracting withholding and credits. This often applies to freelancers, gig workers, creators and people with significant investment income.
Due dates for the 2026 tax year
- April 15, 2026
- June 15, 2026
- September 15, 2026
- January 15, 2027
If a date falls on a weekend or holiday, it moves to the next business day. Check the IRS website for official dates.
How much should you pay?
Your estimated tax includes income tax and self-employment tax, which covers Social Security and Medicare. Many freelancers set aside 25% to 30% of profit. Get a personalised estimate with our Freelance Tax Estimator.
The safe harbor rule
You can generally avoid underpayment penalties if you pay at least 90% of this year’s tax or 100% of last year’s tax (110% for higher earners), spread across the four quarters.
How to pay
- Use IRS Direct Pay or your IRS online account.
- Choose “estimated tax” and the correct tax year.
- Save the confirmation.
- Check whether your state also requires estimated payments.
A simple system
- Open a separate savings account just for taxes.
- Move 25% to 30% of every payment there immediately.
- Pay each quarter from that account.
- Track income and expenses monthly with our Side Hustle Income Tracker.
UK and Canada
In the UK, self-employed people may make payments on account through Self Assessment. In Canada, the CRA may require tax instalments if you owe above certain amounts.
A worked example
Maya earns $48,000 from freelance design in 2026 and has $6,000 of business expenses, so her profit is $42,000.
- Self-employment tax is roughly 15.3% on about 92.35% of profit: around $5,900.
- After deductions, including half of self-employment tax and the standard deduction, her federal income tax might be roughly $2,500 to $3,000.
- Her total federal tax could be around $8,500, or about $2,125 per quarter, plus any state tax.
These numbers are illustrative only. Run your own with our Freelance Tax Estimator.
Two ways to calculate your payments
| Method | How it works | Best for |
|---|---|---|
| Safe harbor (prior year) | Pay 100% (or 110%) of last year’s total tax, split into four | Stable or growing income |
| Current year estimate | Estimate this year’s tax and pay 90% across four quarters | Income that fell or changed a lot |
Deductions that lower your tax
- Home office, if you use a space regularly and exclusively for work.
- Software, equipment and supplies.
- A share of phone and internet costs.
- Business mileage or travel.
- Retirement contributions to a SEP IRA or Solo 401(k).
- Health insurance premiums for eligible self-employed people.
Keep receipts and records; good bookkeeping pays for itself. Track income from all sources with our Side Hustle Income Tracker.
First year of freelancing?
If you had no tax bill last year, you may not owe a penalty this year, but you will still owe the tax at filing time. Setting money aside monthly protects you from a big April shock.
Next steps: never miss a quarterly payment
Set up this system once and it will run all year.
- Add all four due dates to your calendar with reminders a week before.
- Open a separate tax savings account.
- Move 25% to 30% of every payment you receive into it.
- Create an IRS online account to pay and view your payment history.
- Review your estimate mid-year if your income changes.
With money already set aside, each quarterly payment becomes a simple transfer rather than a stressful surprise.
Quarterly estimated taxes for side hustlers with a job
If you have a regular job plus side income, you may be able to avoid quarterly estimated taxes altogether. By increasing the extra withholding on your W-4 at work, your employer withholds enough to cover the tax on your side hustle too.
This works well if your side income is fairly predictable. If it varies a lot, estimated payments may be easier to adjust. Either way, keep track of your side income and expenses so you know roughly how much tax you will owe.
For official, up-to-date guidance, see the IRS website.
Frequently asked questions
What if I miss a quarterly payment?
Pay as soon as possible. Penalties are based on how much and how long you underpaid, so paying late is better than not paying.
Can I pay all at once at the end of the year?
You can, but you may owe an underpayment penalty for the earlier quarters.
I also have a job. Do I still need to pay?
You might not if you increase withholding at your job to cover your side income. Updating your W-4 is an alternative.
Do states require quarterly estimated taxes too?
Many states with income tax do. Check your state tax agency’s website for due dates and payment options.
Quarterly estimated taxes: key takeaways
- Freelancers usually need to pay tax four times a year.
- Set aside 25% to 30% of profit.
- Use safe harbor rules to avoid penalties.
- Pay through IRS Direct Pay or your online account.
Last reviewed: September 2026. This article is general education, not personal financial, tax or legal advice. Rules, rates and limits change, so check official sources or speak to a qualified professional before making decisions. See our Financial Disclaimer.