How to Estimate Quarterly Tax Payments For Your Boston, MA Business

March 10, 2026

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By Sean Burke

How to Estimate Quarterly Tax Payments For Your Boston, MA Business

Key takeaways

Estimated tax payments are required if you expect to owe at least $1,000 in federal tax after withholding and credits
You generally must pay at least 90% of your current-year tax or 100% of last year’s tax (110% if last year’s AGI exceeded $150,000) to avoid penalties
There are two primary ways to calculate estimates: using last year’s tax as a baseline or annualizing based on current-year income
Payments are due in April, June, September, and January, and missing a quarter can trigger an underpayment penalty, even if you catch up later

When you run your own business, you are both the employer and the employee, which means the responsibility for withholding tax falls entirely on you.

If you’ve ever felt the sting of a surprise ‘tax bill’ in April, it’s usually because your quarterly estimates weren’t aligned with your actual income.

But estimating your quarterly tax payments doesn’t have to be guesswork. With the right method, you can calculate a payment amount that relieves the worry of IRS notices and penalties.

Here’s how to estimate quarterly tax payments with confidence.

Who should be paying estimated taxes?

You generally need to make estimated payments if:

You expect to owe $1,000 or more in federal income tax for the year, and
Your withholding and refundable credits will cover less than 90% of this year’s tax, or less than 100% of last year’s tax (110% if last year’s adjusted gross income was over $150,000, or $75,000 if married filing separately).

If you’re self-employed (as a business owner or a gig worker), you probably meet these thresholds because no one is withholding tax on your behalf.

Landlords and investors are another group that can get caught off guard. Even if you have W-2 withholding, it may not account for rental profits or large capital gains, which can lead to an underpayment penalty.

When are 2026 estimated payments due?

For 2026, the federal estimated tax deadlines are:

April 15, 2026
June 16, 2026
September 15, 2026
January 15, 2027 (for fourth-quarter 2026 income)

You’re required to pay as income is earned. So if you skip April and double up in June, the IRS may still assess a first-quarter penalty.

Now, you are allowed to pay more frequently. Some Rockland business owners I work with prefer making monthly payments, because twelve smaller transfers can feel more manageable than four larger ones.

Also, remember that your state may have its own estimated tax requirements, with different thresholds and deadlines. So always check those too.

How to estimate quarterly tax payments

There isn’t just one method. The right approach depends on how predictable your income is.

As one method, you can use last year’s total tax liability as a baseline (AKA, the Safe Harbor Approach). This works well if your business’s income is relatively stable.

For example, if your total federal tax last year was $10,000, you could send in $2,500 each quarter this year.

Under the safe harbor rule, if you pay at least:

100% of last year’s tax (or
110% if last year’s AGI exceeded $150,000),

You generally avoid underpayment penalties (even if you end up owing more when you file).

But maybe you have a seasonal business, or you do commission-based work, which makes your income less steady. You could use the Annualized Income Installment Method to estimate your quarterly tax payments.

With this method, you calculate your income and deductions through the end of each quarter and estimate your tax based on what you’ve earned so far. You then adjust payments accordingly.

How do I make quarterly estimated tax payments?

You’ll use Form 1040-ES to calculate your payments. Then, to actually make the payments, you have a few options. The most commonly used is the Electronic Federal Tax Payment System (EFTPS), a free online service that allows secure payments and keeps a record of your payment history.

You can also mail a check with that Form 1040-ES, which provides a paper trail if you prefer physical documentation. Or, you can use the IRS2Go mobile app on your phone.

If your projections change mid-year, you can always adjust future payments. But when you file your annual return, you may need to attach Form 2210 to explain why the payments weren’t equal.

And if you overpaid, you can either receive a refund or apply the excess to next year’s estimates.

What happens if I don’t pay quarterly estimated taxes?

If you don’t pay enough in estimated taxes during the year, you may owe an underpayment penalty (with interest) in addition to the tax you still owe. The IRS will send you a notice if that’s the case.

The penalty is calculated based on:

The amount you underpaid
How long the payment was underpaid
The interest rate for that quarter (which changes quarterly)

The IRS determines the penalty using your total tax liability (your tax accrued minus credits) shown on your return.

There are some special cases where the penalty won’t apply. You won’t owe a penalty if you had no tax liability in the prior year, you were a U.S. citizen or resident alien for the full year, and the prior year covered 12 months.

You could also qualify for a waiver if you underpaid due to reasonable cause, like a casualty or disaster, retirement at age 62 or older, or disability during the current or prior year.

Final thoughts

Your first estimated payment for 2026 is coming up in only a matter of weeks (April 15).

And if figuring out how to estimate quarterly tax payments is something you quietly worry about every year, I want to make this year different.

With the right projection, we can arrive at a number that you can be confident protects you from penalties.

So, let’s take a look at your numbers before that first deadline hits.

FAQ

“What happens if I miss a quarterly tax deadline?”

If you miss a deadline, the best course of action is to pay as much as you can as soon as possible. The IRS calculates underpayment penalties based on how much you owe and how long the payment was delayed. Even if you can’t pay the full amount, making a partial payment immediately will stop the penalty clock on that portion of the debt.

“Can I skip quarterly payments if I didn’t make a profit this quarter?”

Yes. Because you are required to pay tax as you earn income, if your Boston, MA business had a dry spell or high expenses resulting in no net profit for a specific period, you may not owe an estimated payment for that quarter. But you should use the Annualized Income Installment Method to document these fluctuations so you can explain to the IRS why your payments weren’t equal at the end of the year.

“I have a W-2 job and a side hustle. Do I still need to pay quarterly?”

Not necessarily. You can avoid quarterly payments by asking your W-2 employer to withhold extra federal income tax from your paycheck to cover the taxes on your side hustle. As long as your total withholding reaches 90% of the current year’s tax or 100-110% of last year’s tax, you won’t be penalized for not sending in separate quarterly checks.

“Is the 15.3% self-employment tax included in quarterly estimates?”

Yes. When you calculate your quarterly payments using Form 1040-ES, you must include both your standard income tax and your self-employment tax (which covers Social Security and Medicare).

“Can I pay my quarterly taxes monthly instead?”

Absolutely. While the IRS has four specific deadlines, these are actually the last days you can pay for that period without a penalty. Many gig workers and business owners find it easier to budget by making monthly or even bi-weekly payments.