If you're a W-2 employee — server, bartender, hourly with a paycheck — your employer withholds taxes every two weeks and you settle up once a year in April. Quarterly deadlines don't apply to you.
If you're self-employed — rideshare driver, delivery driver, booth-rent stylist, anyone with 1099 income — the IRS expects four payments a year. Skip them and you owe penalties even if you pay the full balance in April.
The four dates
| Quarter | Income earned | Payment due |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15 |
| Q2 | Apr 1 – May 31 | June 15 |
| Q3 | Jun 1 – Aug 31 | September 15 |
| Q4 | Sep 1 – Dec 31 | January 15 (next year) |
Notice Q2 is only two months and Q4 stretches across four. This is not a typo — it's a holdover from a 1955 tax-code rewrite that nobody has bothered to fix.
Who has to pay quarterly
The IRS rule, in plain English: if you expect to owe more than $1,000 in federal tax after withholdings and credits, you should be paying quarterly. For most self-employed tipped workers, that's basically anyone netting more than about $6,000 a year in 1099 income.
How much to pay
There are two acceptable methods:
The safe harbor (easier): Pay 100% of last year's total tax bill, divided into four equal payments. If last year you owed $4,800 in tax, send $1,200 each quarter. The IRS will not penalize you even if this year ends up higher. (If your prior-year AGI was over $150,000, the safe harbor is 110%, not 100%.)
The current-year method (accurate): Estimate your full-year income and expenses, calculate the tax owed (income tax + 15.3% self-employment tax), divide by four. NeighCheck does this projection from your logged income; you can also use IRS Form 1040-ES.
The current-year method gets your money working for you instead of sitting with the IRS. The safe harbor protects you from penalty. Pick based on whether your income is steady (safe harbor is fine) or volatile (current-year is smarter).
How to actually pay
Three ways:
- IRS Direct Pay — irs.gov/payments, free from a bank account. The least painful option.
- EFTPS — the IRS's electronic system. Takes a week to enroll, then it's free and reliable.
- Mailing Form 1040-ES with a check. Still works. Slow.
The underpayment penalty
If you underpay, the IRS charges interest on the shortfall from the date the payment was due. The rate floats with federal short-term rates and has recently been around 7–8% annualized. Not catastrophic on small amounts, but it stacks. A $4,000 underpayment for a full year is roughly $300 in penalty.
Worse: this is on top of the tax you still owe. The penalty doesn't reduce your bill — it adds to it.
State quarterlies
Most states with income tax also require quarterly estimates. The dates usually match federal (Apr 15 / Jun 15 / Sep 15 / Jan 15). Check your state's Department of Revenue site — Alabama, California, New York, and most others have their own equivalent of 1040-ES.