Taxes
Estimated Quarterly Tax Calculator
The US tax system is pay-as-you-go. Without an employer withholding for you, four payments a year keep you penalty-free — and you only need the smaller of two targets: 90% of this year's tax, or 100% of last year's.
Tested against worked examplesHow we verify
Income tax plus self-employment tax.
From a W-2 job, a spouse's job, or retirement distributions.
Line 24 of your prior-year Form 1040 — not what you owed in April.
Send each quarter: $3,500
Send each quarter
$3,500
The prior-year safe harbour is the cheaper route at 100% of last year's tax.
The safe harbour keeps you penalty-free, but it does not cover the full bill. Set aside the difference now — the balance is due on 15 April regardless.
- Expected shortfall for the year
- $20,000
- Prior-year safe harbour target
- $18,000
- Quarterly via safe harbour
- $3,500
- Quarterly via 90% of this year
- $4,400
Compare scenariosTry three values of one input
| Expected tax this year | |||
|---|---|---|---|
| Send each quarter | $3,500 | $3,500 | $3,500 |
| Expected shortfall for the year | $17,500 | $20,000+$2,500 | $22,500+$5,000 |
| Quarterly via 90% of this year | $3,838 | $4,400+$563 | $4,963+$1,125 |
Every other input stays at the value you set above — currently $24,000 for expected tax this year. Differences are measured against the first column.
Saved scenariosSave this calculation
Saved in this browser only — no account, and nothing is sent to us. Clearing your browser data deletes them.
How this calculator works
Two targets are computed and the lower one wins. The current-year route takes 90% of expected tax; the prior-year safe harbour takes 100% of last year's tax, or 110% when prior-year AGI exceeds $150,000. Existing withholding is subtracted from the target, and the remainder is divided into four equal payments.
Equal quarterly instalments are assumed. If your income is seasonal, the annualised income instalment method may lower an early payment. This does not compute your tax — feed it your own estimate from a projection or last year's return, and note that state estimated payments follow separate rules and deadlines.
What this assumes
- Safe-harbour rules: penalties are generally avoided by paying at least 90% of this year's tax, or 100% of last year's — 110% for higher earners.
- Four quarterly deadlines that are not evenly spaced. Missing one is not cured by overpaying the next.
- State estimated payments are separate and are not included.
What changes this number
- Which safe harbour you use
- Last year's number is known and this year's is a forecast, which is why the prior-year harbour is the safer target.
- Income timing
- Uneven income can be annualised on the return, which sometimes reduces a penalty the flat method would impose.
- Withholding elsewhere
- Tax withheld from a salary or a pension counts as paid evenly across the year, which can cover a late-year shortfall.
A worked example
Take the freelancer with some withholding scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Expected tax this year
- $24,000
- Tax already withheld
- $4,000
- Last year's total tax
- $18,000
- Last year's AGI
- $120,000
What it returns
- Send each quarter
- $3,500
- Expected shortfall for the year
- $20,000
- Prior-year safe harbour target
- $18,000
- Quarterly via safe harbour
- $3,500
- Quarterly via 90% of this year
- $4,400
The safe harbour keeps you penalty-free, but it does not cover the full bill. Set aside the difference now — the balance is due on 15 April regardless.
Try an example
Frequently asked questions
Who has to pay estimated taxes?
Anyone expecting to owe $1,000 or more after withholding and credits: freelancers, contractors, landlords, people with large investment income, and anyone whose W-2 withholding falls short. It is the mechanism that keeps the pay-as-you-go system working without an employer.
What is the safe harbour rule?
Pay either 90% of this year's tax or 100% of last year's — 110% if your prior-year AGI exceeded $150,000 — and no underpayment penalty applies, even if you end up owing much more. The prior-year figure is known and fixed, which makes it the safer target when income is rising.
When are estimated payments due?
15 April, 15 June, 15 September, and 15 January of the following year, shifting to the next business day when a date falls on a weekend or holiday. The quarters are not equal lengths, which surprises people budgeting evenly across the year.
Can I use withholding instead?
Yes, and it is often better. Withholding is treated as paid evenly across the year no matter when it happens, so a large December withholding from a bonus or an IRA distribution can retroactively cure earlier underpayment. An estimated payment only counts for the quarter it lands in.
What is the penalty for underpaying?
Interest on the shortfall for each quarter it was outstanding, at the federal short-term rate plus three percentage points. It is not a flat fine — a small, brief shortfall costs little, while missing every quarter on a large liability adds up.
What if my income is uneven?
The annualised income instalment method on Form 2210, Schedule AI, lets you match payments to when you actually earned. It is more work, but it prevents a penalty for a quarter in which you genuinely earned nothing.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.