Calculating and Paying Quarterly Estimated Taxes

If you're a freelancer or independent contractor, you're considered self-employed, which means you're responsible for paying self-employment and income taxes.

Quarterly estimated taxes help you proactively pay taxes as you earn money throughout the year.

You can print your quarterly estimated tax vouchers through TaxAct.

When to pay estimated taxes:

If you expect a tax bill of at least $1,000 after subtracting withholding and refundable credits, you'll be expected to pay taxes.

Even if you owe more than $1,000 when you file, you won’t be assessed an underpayment penalty if your total withholding and timely estimated tax payments equal at least 90% percent of your expected current tax liability or 100% percent of your previous year's tax liability (or 110% if your previous year's adjusted gross income was more than $150,000 or $75,000 if married filing separately).

Why previous year tax liability matters:

If your previous year tax liability was zero (0), you're not required to make estimated tax payments for the current year. You can still choose to make quarterly payments so you’re not faced with a huge bill at tax time.

Determining how much to pay each quarter:

Either complete the Estimated Tax Worksheet for your tax year or pay 100% percent (or 110% as described above) of your previous year's tax liability.

Calculate your total estimated tax for the year and divide that number by four. If you missed a payment, adjust subsequent payments accordingly.

Importance of meeting the payment deadline:

Even if you pay enough tax each quarter, you may still be assessed an underpayment penalty if you didn't pay the minimum required amount by the due date each quarter.

To estimate your current year tax payments:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click 2021 Estimated Tax Payments in the Federal Quick Q&A Topics menu, then click Yes.
  3. The program will proceed with the interview questions for you to enter or review the applicable information.

Options for making estimated tax payments:

If you figure your quarterly payments with TaxAct, you can print the payment vouchers and mail them to the IRS along with checks or money orders.

  1. From within your TaxAct Online return, click Print Center down the left to expand, then click Custom Print.
  2. Check Form 1040-ES in the top section. You may need to scroll down in the section to locate the item.
  3. Click Print, then click the PDF link. Click the printer or save icon.

Note. If you see a message indicating you have not paid your return fees, click the View/Pay your return fees link, which will direct you through the Paper Filing steps. Continue through the screens until you have processed the payment for your product fees and then repeat the steps to print.

  1. Click Forms.
  2. Click to expand the Federal Forms and Schedules folder.
  3. Double-click Form 1040-ES - 2021 Estimated Tax Worksheet.
  4. Click the Printer icon above Form 1040-ES.

To pay quarterly taxes online:

See the Paying Your Taxes webpage to learn more about the IRS Direct Pay With Bank Account or the IRS EFTPS: The Electronic Federal Tax Payment System.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.