💸 Quarterly Taxes Explained:

The 2025 Guide for U.S. Freelancers, Small Business Owners & Side Hustlers

When you’re self-employed, your tax deadlines don’t just come in April—they come every quarter. If you earn income without automatic withholding (like a paycheck), you’re likely required to make quarterly estimated tax payments to the IRS.

Failing to pay on time? That could mean penalties—even if you pay your full tax bill at year-end.

👀 Who Needs to Pay Quarterly Taxes?

You must make quarterly payments if both apply:

• You expect to owe at least $1,000 in federal taxes after subtracting withholdings and credits, and
• You receive income not subject to withholding, such as:

✔️ Self-employment or freelance income
✔️ Gig economy work (Uber, DoorDash, Fiverr, etc.)
✔️ Rental property income
✔️ Dividends, interest, or capital gains
✔️ Business profits from a sole proprietorship, LLC, or S Corp

📌 Side hustle warning: Even if you’re a W-2 employee, if your extra income isn’t covered by your paycheck withholding, the IRS may still expect quarterly payments.

📅 2025 Quarterly Tax Deadlines

For the 2025 tax year, the IRS has set the following quarterly estimated tax due dates:

• Quarter 1 (Q1)
  Covers income from January 1 to March 31
  Payment due: April 15, 2025
• Quarter 2 (Q2)
  Covers income from April 1 to May 31
  Payment due: June 17, 2025
• Quarter 3 (Q3)
  Covers income from June 1 to August 31
  Payment due: September 16, 2025
• Quarter 4 (Q4)
  Covers income from September 1 to December 31
  Payment due: January 15, 2026

⏰ If a due date falls on a weekend or holiday, it shifts to the next business day.

🧾 What’s Included in Estimated Taxes?

You’re not just prepaying income tax. Your quarterly payments also include:

• Federal Income Tax
• Self-Employment Tax (15.3% for Social Security & Medicare)
• Additional taxes, like the Net Investment Income Tax (NIIT) if applicable

Don't forget state taxes—most states (like California, New York, and Texas) also require quarterly payments. Always check your state’s Department of Revenue for deadlines and forms.

💡 How to Estimate and Calculate Your Payments

1. Estimate your total income for the year (including all freelance, contract, rental, and investment income).
2. Subtract eligible business expenses and deductions (home office, internet, gear, etc.).
3. Use IRS Form 1040-ES or accounting software to estimate your total tax.
4. Divide by 4 for equal quarterly payments — or adjust based on seasonal income.

📊 Pro Tip: Use bookkeeping tools like QuickBooks, Xero, or Go Peak’s tax calculator to simplify your math.

💻 How to Pay Your Quarterly Taxes

Online:

• IRS Direct Pay
• EFTPS.gov (for businesses and professionals)

By Mail:

• Send a check with your Form 1040-ES payment voucher
• Important: Write your Federal Employer Identification Number (FEIN) or Social Security Number (if no FEIN) on the check so it can be applied accurately

Through Software:

• Use platforms like TurboTax, TaxSlayer, or work with your accountant/bookkeeper for automatic reminders and payments.

⚠️ What If You Don’t Pay?

Even if you pay the full amount at year-end, you could face penalties if you missed required quarterly payments. The IRS charges interest and fees for:

• Paying less than 90% of your current year’s tax, or
• Paying less than 100% of your prior year’s tax (or 110% if you earned over $150K)

  ❗These penalties can add up via interest and late fees.

✅ Tips to Stay on Track

✔️ Save 25–30% of each payment you receive
✔️ Use a dedicated tax savings account
✔️ Set calendar reminders for each due date
✔️ Hire a tax pro to stay updated on shifting rules
✔️ Adjust your quarterly payments if your income fluctuates

✅ Final Thoughts

Quarterly taxes might seem like a burden — but they’re a smart move to avoid surprises, reduce penalties, and protect your cash flow. With a bit of planning and the right tools, you’ll keep your finances running smoothly all year long.

💬 Need help calculating or filing your quarterly taxes?

Peak Accounting specializes in helping freelancers, LLCs, and growing business owners stay compliant — without stress.

👉 Let’s talk about your next quarterly payment