When are estimated taxes due? A quick breakdown

It's that time of year again. Tax season is quickly approaching and for many people, it can be a stressful time. One question on the minds of many taxpayers is "When are estimated taxes due?" Well, we have you covered! This blog post will answer that question as well as provide other helpful information about tax season in general.

In this article, we'll cover 1099 quarterly taxes dates, rules for making quarterly tax payments, and exceptions for estimated tax requirements.

1099 quarterly taxes dates to pay estimated taxes

Many folks who work at a company, have taxes withheld from their paychecks in order to pay to the government. In most cases, the money taken from the employee's annual income is refunded to them. If the employer does not withhold enough, then the employee will have to pay additional taxes.

Independent contractors on the other hand are paid in full. They are self-employed and do not have taxable income withheld from their paychecks throughout the year. Individuals have to pay estimated taxes if they have a substantial amount of taxable income that is not subject to withholding.

The U.S. operates on a "pay-as-you-go" system. If your income does not have withholding for Social Security and Medicare taxes (or self-employment tax), you must pay the IRS every quarter. This requires contractors or self-employed individuals to make estimated tax payments four times a year instead of waiting until annual tax returns are due.

To avoid a penalty, the IRS due dates to make estimated tax payments for the 2024 tax year are:

• April 15, 2024
• June 17, 2024
• September 16, 2024
• January 15, 2025

• April 15 (First quarter: January 1 - March 31)
• June 15 (Second quarter: April 1 - May 31)
• September 15 (Third quarter: June 1 - August 31)
• January 15 of the following year (Fourth quarter: September 1 - December 31)

If a due date falls on a weekend or legal holiday, then the IRS requires payments to be issued on the next business day.

In 2024, the due date for the first estimated tax payment remains April 15, even though some filing deadlines have shifted. This means you must make your estimated tax payment by April 15, 2024.

If you're self-employed or have other fourth-quarter income requiring quarterly estimated taxes, get your payments postmarked before each deadline. You can use freelancer tax software like Bonsai Tax to send payment reminders.

Estimated tax payment due dates for the current and upcoming years

Understanding 1099 quarterly tax deadlines for 2024

1099 filers must meet quarterly estimated tax deadlines to avoid penalties. For the 2024 tax year, the IRS has set four key due dates: April 15, June 17, September 16, and January 15, 2025. These dates correspond to payments for income earned in the first, second, and third quarters of 2024, plus a final payment for the last quarter.

For example, if you received 1099 income as a freelancer in March 2024, your first estimated tax payment is due by April 15, 2024. Missing these deadlines can result in underpayment penalties and interest, so it’s crucial to mark these dates on your calendar. Tools like the IRS Direct Pay system or tax software such as TurboTax Self-Employed can help you submit payments on time.

To stay compliant, calculate your estimated taxes based on your expected 2024 income and expenses. Set reminders a week before each deadline to review your finances and make payments promptly. This proactive approach helps manage cash flow and avoids last-minute tax surprises.

Key estimated tax dates for 2025 and how to prepare

The IRS has announced the estimated tax deadlines for 2025, which are April 15, June 17, September 16, and January 15, 2026. These dates remain consistent with prior years, allowing freelancers and small business owners to plan ahead. Preparing early by reviewing your 2024 income and expenses can improve your 2025 tax payment accuracy.

Start by estimating your 2025 income using invoicing data from platforms like QuickBooks Self-Employed or FreshBooks. These tools can generate reports that help forecast quarterly earnings. Once you have your income estimate, use the IRS Form 1040-ES worksheet to calculate your quarterly payments, factoring in self-employment tax and any deductions.

Setting up automatic payments through IRS Direct Pay or your bank can ensure you never miss a deadline. Additionally, keep detailed records of all 1099 income and related expenses throughout the year to simplify your quarterly calculations and reduce errors.

State-specific considerations for 1099 quarterly tax payments

Besides federal estimated tax payments, many states require quarterly tax payments on 1099 income. Deadlines often align with federal dates but vary by state. For instance, California and New York both require quarterly estimated payments on the same schedule as the IRS, while Texas does not have a state income tax.

Freelancers should check their state’s department of revenue website for exact dates and payment methods. Some states, like Illinois, offer online portals for easy payment submission, while others may require mailed checks. Using tax software like TaxAct or H&R Block can help manage both federal and state deadlines in one place.

To avoid penalties, track both federal and state estimated tax due dates carefully. Consider consulting a tax professional if you operate in multiple states or have complex income streams. Staying organized with a tax calendar that includes all relevant deadlines will keep your tax payments on track year-round.

When do you not have to pay estimated taxes?

The IRS has three conditions for if you are required to pay estimated taxes. You do not have to file quarterly taxes if you meet these three conditions:

• You had zero tax liability from the prior year
• You were a U.S resident or citizen for the whole year
• If your prior tax year covered a 12-month period

Fishermen and farmers have exceptions for paying estimated tax.

The IRS accounts for life events that may affect taxes. Events like marriage, childbirth, or serious injury can impact tax obligations.

The worksheet of Form 1040-ES is typically used by individuals, sole proprietors, partners, and S corporation stockholders. They'll need to know what their adjusted gross income is likely to be.

The $1,000 Rule

The penalty does not affect individuals who owe less than $1,000 in taxes. Those expected to owe less than $1,000 in tax liability do not need to worry about estimated taxes.

This is after taking into account any withholding and refundable tax credits such as earned income credits and premium tax credits.

How to calculate an estimated tax payment

Calculate your quarterly estimated tax payments using free online tools. Each estimated tax payment should be the same every quarter. It is calculated by adding up your total tax liability for the year, including income tax, self-employment tax, and any other taxes, then dividing that number by four.

You can use Form 1040-ES to calculate and pay your estimated taxes. See if the 2024 estimated tax payments are influenced here.

How to make an estimated tax payment

There are many ways to make estimated tax payments to the IRS, including online and by mail.

You may send estimated tax payments with Form 1040-ES by mail, or you can make your estimated tax payments online with IRS Electronic Federal Tax Payment System (EFTPS) or by phone using the IRS2Go app. Visit IRS.gov/payments to view all the options.

How to prepare to make estimated tax payments

While you can prepare and calculate self-employment taxes in order to pay by April 15 the following year, you will likely be subject to penalties and interest for not paying Quarterly Estimated Taxes (QET).

Many freelancers don't understand this and end up paying more self-employment taxes each year because of penalty fees they've accrued. To avoid this, it is always best to pay the estimated taxes every quarter to the IRS and state (if applicable).

When you file your tax return, if you paid too much in quarterly taxes, you can get a refund. If you paid too little, you will owe taxes and receive a penalty.

Rules for filing estimated tax payments

The IRS has clear rules for filing estimated taxes and many freelancers don't understand this at all, which leads to an increase in self-employment taxes every year because they're accumulating penalties due to not paying quarterly estimated taxes on time.

You can either pay 100% of the tax owed with your return or use a payment method other than withholding.

You need to pay quarterly estimated taxes if you fall into one of these categories:

• You expect to owe at least $1,000 in tax for the year, after subtracting your withholding and refundable credits.
• You expect your withholding and refundable credits to be less than the smaller of:
• a) You must pay at least 90% of the tax to be shown on your tax return for the current year, or
• b) 100% of the tax shown on your 2020 tax return. Your 2020 tax return must cover all 12 months (110% if your 2020 adjusted gross income was more than $150,000).

If you use your prior year tax bill as a gauge for your current year's tax liability, as long as you pay 100% of your tax bill from the previous tax year, you will not receive a penalty.

If your income changes dramatically—for example, if you lost a client and your income decreased—you can adjust the remaining estimated tax payments. By doing so, you can avoid or minimize overpaying estimated tax payments. Many self-employed individuals overpaid their 2021 estimated taxes due to the coronavirus pandemic.

• You expect to owe at least $1,000 in tax after subtracting withholding and refundable credits
• Your withholding and refundable credits are less than the smaller of 90% of the tax to be shown on your current year’s tax return or 100% of the tax shown on your prior year’s tax return
• You expect your income to change dramatically (for example, loss of a client), allowing you to adjust the remaining estimated tax payments to minimize overpayment

Failing to pay a quarterly estimated tax payment properly will mean fees on top of the taxes you owe. If you don't pay enough of your tax liability or less than you should throughout the year, you can receive an underpayment tax penalty.

Alternatively, instead of making estimated payments throughout the year, you can estimate your Federal tax liability and pay in full on the designated Tax Day. While you can pay all your taxes by April 15, it's probably not the best for your bank account.

Frequently asked questions about estimated quarterly tax payments

What are the 1099 quarterly taxes dates for 2024?

The 1099 quarterly taxes dates for 2024 are:

• April 15, 2024
• June 17, 2024
• September 16, 2024
• January 15, 2025

These dates correspond to the deadlines for paying estimated taxes if you receive income reported on a 1099 form, such as from freelancing or contract work.

For example, the first quarter payment covers income earned from January 1 to March 31 and is due by April 15, 2024. If a deadline falls on a weekend or holiday, the IRS typically moves it to the next business day, as it did with June 15 moving to June 17 in 2024. Keep track of these dates to avoid penalties and interest.

To stay organized, use calendar reminders or tax software like TurboTax or QuickBooks Self-Employed, which send alerts before each due date. Timely payments ensure you stay compliant and avoid surprises at tax time.

What happens if I miss a quarterly tax payment deadline?

Missing a quarterly tax payment deadline can result in penalties and interest charges from the IRS. The penalty is usually calculated based on the amount you underpaid and the length of the delay, making it important to pay on time or as soon as possible after missing a deadline.

For example, if you miss the June 17, 2024 payment, the IRS will charge interest starting from that date until the payment is made. Additionally, a failure-to-pay penalty of 0.5% per month can apply, up to 25% of the unpaid tax. However, if you pay the full amount by the next deadline, you may reduce penalties for later quarters.

If you realize you missed a payment, file and pay immediately using IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS). Also, consider adjusting your next estimated payment to cover any shortfall and avoid further penalties.

How do I calculate how much to pay for estimated quarterly taxes?

Calculating estimated quarterly taxes involves estimating your expected income, deductions, and credits for the year, then dividing the tax owed into four payments. The IRS Form 1040-ES provides worksheets to help freelancers and small business owners with this calculation.

For instance, if you expect to owe $12,000 in federal taxes for 2024, you would pay $3,000 each quarter. To avoid penalties, you must pay at least 90% of your current year’s tax or 100% of last year’s tax, whichever is less. Some states, like California, have their own quarterly estimated tax requirements and deadlines, so check local rules.

Using accounting software like FreshBooks or consulting a tax professional can simplify this process. Regularly updating your income estimates each quarter helps keep payments accurate and prevents large tax bills at year-end.

Can I change my estimated tax payments during the year?

You can adjust your estimated tax payments at any time during the year if your income or deductions change. This flexibility helps freelancers and small business owners avoid overpaying or underpaying taxes as their earnings fluctuate.

For example, if you earned more income in the second quarter than expected, increase your third and fourth quarter payments to cover the additional tax liability. Conversely, if your income drops, you can reduce future payments to improve cash flow.

To make changes, recalculate your estimated tax using the IRS Form 1040-ES worksheet or tax software, then submit the new payment by the upcoming deadline. Staying proactive with adjustments prevents surprises and keeps your tax payments aligned with your actual earnings.

What is the penalty for not filing with the IRS every quarter?

Missing the deadlines to file your quarterly taxes triggers an IRS estimated tax penalty, typically 0.5% of the tax owed on the due date. An additional 0.5% penalty accrues for each month you don't file after the deadline. The penalty caps at 25%. Pay your estimated taxes promptly if you miss the deadline to avoid these fees.

What happens with income later in the year?

If you didn't earn income until later in the year, you don't have to pay estimated tax until you have income to owe taxes on. For example, if you start earning income after August 2024, you are not required to make estimated payments until the September 15, 2024 quarter. In this case, you could file your estimated taxes in full or divide the payments into two, with the second payment due January 15, 2025.

Farmers And Fishermen

For farmers and fishermen who earned two-thirds of their income from farming or fishing, they can make one estimated tax payment for the tax year or by January 18, 2025. If you file your tax return prior to March 1, 2025, and pay all the tax you owe at that time, you do not need to make estimated tax payments.

Summary of 1099 quarterly taxes dates and estimated payments

This guide aims to help you understand quarterly taxes and their due dates. You can use the annualized installment method at tax time to avoid penalties for not paying or filing estimated taxes throughout the year. For example, if you file your 2024 tax return by January 31, 2025, and pay the full balance, you don't have to make the estimated payment due January 18, 2025.

Be sure to check the IRS's site for more updates. Paying estimated taxes by the deadlines is important for many reasons, including avoiding penalties. However, the most important reason is to avoid any delinquent payments from showing up on your credit report.