A Guide on estimated taxes for Freelancers and Small Business Owners

If you’re self-employed, run a small business, or earn income without tax withholding you need to learn about estimated taxes. Some taxpayers submit their taxes once every year but as a business everything is different. Let’s dive in!

What Are Estimated Taxes?

Estimated taxes are payments done each quarter to the IRS (and usually the state) on income that isn’t subject to withholding. This includes:

• Freelance or contractor income
• Business profits
• Rental income
• Side hustles (e.g., Uber, Etsy, online sales)

Do I have to do estimated taxes?

You generally must make estimated payments if:

• You expect to owe $1,000 or more in federal tax for the year
• You don’t have enough tax withheld from wages or other income
• You’re self-employed or own a pass-through business (LLC, S-Corp, partnership)

What happens if I don’t pay?

If  taxes aren’t submitted on time or underpaid, the IRS may charge penalties or interest to your account, giving you more trouble in the long run.

Final Tip

Prepare your business finances to set aside 25–35% of your net income into a separate savings account so that you don’t have any complications when paying the quarterly taxes.

Need help calculating your estimated taxes or setting up a payment plan?

Our office helps freelancers and business owners stay compliant year-round—so tax season doesn’t come with surprises.

*The information provided in this article is generic in nature and for informational purposes only, it is not a substitute for specific advice in your own circumstances.