Quarterly Estimated Taxes: A Complete Guide for the Self-Employed

When you work for yourself, nobody withholds tax from your pay, so the IRS and Virginia expect you to pay as you go through quarterly estimated taxes. Get it right and April is a non-event. Get it wrong and you face a large bill plus an underpayment penalty. This guide covers who has to pay, how to calculate the amount with 2026 numbers, the federal Form 1040-ES and Virginia Form 760ES due dates through 2027, and the safe-harbor rules that protect you even when your income is hard to predict.

Who must pay quarterly estimated taxes

Estimated taxes aren't just for sole proprietors. You probably need them if you are any of these:

• A freelancer, independent contractor or 1099 worker
• A gig worker (rideshare, delivery, short-term rentals, online sales)
• A partner, LLC member or S corporation shareholder
• A landlord, an investor with large dividends or capital gains, or a retiree whose pension and IRA withdrawals don't have enough withheld

Under the federal rule, you generally must pay estimated tax for 2026 if you expect to owe at least $1,000 after subtracting withholding and refundable credits, and your withholding and credits will cover less than the smaller of 90% of your 2026 tax or 100% of your 2025 tax. Note that "tax" here includes self-employment tax, not just income tax.

Safe harbor rules: the simplest way to avoid penalties

A safe harbor is a payment target that guarantees no underpayment penalty, even if you end up owing a lot in April. The most reliable one is based on last year's tax, because you already know that number.

The prior-year safe harbor shines when your income is growing. If your 2025 federal tax (income tax plus self-employment tax) was $10,400, four payments of $2,600 fully protect you for 2026, even if your business doubles. You'll still owe the difference by April 15, 2027, so set it aside.

How to calculate quarterly estimated taxes for 2026

Your estimate has two federal parts, self-employment tax and income tax, plus Virginia income tax.

1. Estimate net profit. Gross receipts minus business expenses (Schedule C). Vehicle use counts at 72.5¢ a mile for January–June 2026 and 76¢ a mile for July–December 2026 if you use the standard rate.
2. Self-employment tax. Multiply net profit by 92.35%, then by 15.3% (12.4% Social Security + 2.9% Medicare). Social Security applies only up to $184,500 of combined wages and self-employment earnings for 2026. Medicare has no cap, and the Additional Medicare Tax of 0.9% applies above $200,000 (single) or $250,000 (joint).
3. Adjusted gross income. Subtract half of your SE tax, plus any self-employed health insurance and SEP/solo 401(k) contributions.
4. Taxable income. Subtract the 2026 standard deduction ($16,100 single, $32,200 joint, $24,150 head of household) or itemized deductions, and the qualified business income deduction (generally 20% of QBI, limited by taxable income).
5. Income tax. Apply the 2026 brackets (single: 10% to $12,400, 12% to $50,400, 22% to $105,700, 24% to $201,775 and so on), then subtract credits.
6. Virginia. Start from federal AGI, subtract the Virginia standard deduction ($8,750 single / $17,500 joint) and $930 per exemption, and apply 2%–5.75%. Our Virginia income tax guide explains the subtractions.
7. Divide by four, then subtract anything that will be withheld from a W-2 job or pension.

Worked example: a Stafford freelancer's 2026 estimates

Notice the effective rate: about 24% of net profit goes to tax. That's why many advisors suggest setting aside 25–30% of every payment you receive until you know your real numbers.

2026 and 2027 estimated tax due dates

Each payment covers income earned in a specific window, and the windows are uneven. The second "quarter" is only two months long and the fourth is four. Virginia's first deadline is May 1, the same day its annual return is normally due.

* May 1, 2027 is a Saturday, so the payment shifts to the next business day. ** January 15, 2028 is a Saturday and January 17 is the Martin Luther King Jr. Day holiday. Confirm these dates against the 2027 forms when they're released. The full calendar of every filing date is in our 2026–2027 tax deadline guide.

The January shortcut: you can skip the January 15, 2027 federal payment if you file your 2026 return by February 1, 2027 (January 31 is a Sunday) and pay everything due. Virginia's version: file and pay in full by March 1, 2027.

How to pay federal and Virginia estimates

IRS

• IRS Online Account: pay, schedule payments up to a year ahead, and see every estimate you've made. That's handy at filing time.
• IRS Direct Pay: a free bank transfer with no enrollment. Choose "Estimated Tax" and the right tax year.
• EFTPS: individuals can no longer open new EFTPS enrollments. Existing users can keep using it "for now," but the IRS is steering individuals to the Online Account and Direct Pay.
• Card or digital wallet (processor fees apply), or check with the 1040-ES voucher payable to "United States Treasury." The IRS now warns that the postmark is the date USPS processes the mail, which may be later than the day you dropped it off. Mail early or pay online.

Virginia

• Individual online account or the 760ES eForm (no login needed). Both pay by debit and let you schedule a future date.
• ACH credit from your bank, or a paper voucher mailed to Virginia Tax or your city or county.
• Once any installment exceeds $1,500, or your total liability exceeds $6,000, all future Virginia payments must be electronic.

Uneven income? Use the annualized income method

The standard rule assumes you earn evenly and pay four equal installments. If your income is lumpy (a landscaper who earns most of it May–October, a holiday-season seller, a consultant who lands one big contract in the fall), you may owe little or nothing for early periods. The annualized income installment method on Form 2210, Schedule AI, matches each required payment to what you actually earned through the end of each period. The IRS also points to it if you first need to start paying after March 31. You file Schedule AI with your return even if it shows no penalty. Virginia has a matching exception on Form 760C for installments that cover 90% of tax on annualized income.

The underpayment penalty, in real dollars

The federal penalty works like interest. The IRS applies its underpayment rate, 7% a year for October–December 2026, to each installment shortfall for each day it stays unpaid. Being $3,000 short on the September 15 payment for 90 days costs roughly $52. Annoying, but not a disaster, and it stops the day you pay. You don't pay a penalty if you owe less than $1,000 at filing.

The IRS can waive the penalty if the underpayment came from a casualty, disaster or other unusual circumstance, or if you retired after reaching age 62 or became disabled and had reasonable cause. Virginia computes its addition to tax on Form 760C. It doesn't apply if the total of all installment underpayments for the year is $1,000 or less. Separately, Virginia charges interest on late tax at the federal underpayment rate plus 2%.

Tips for gig workers and 1099 contractors

• Open a separate "tax" savings account and move 25–30% of every deposit into it the day it arrives.
• Track mileage as you drive. At 72.5¢ and 76¢ a mile in 2026, 10,000 business miles split evenly across the year is worth roughly $7,400 of deductions. A mileage log is what an auditor will ask for.
• Report all income, whether or not you receive a 1099-NEC or 1099-K. The forms are information returns, not the test for what's taxable.
• Have a W-2 job too, or a spouse with one? Raise withholding on Form W-4 (and VA-4 for Virginia). Withholding is treated as paid evenly through the year, so a fall W-4 change can cover a shortfall from the spring. Estimates paid late can't.
• Apply your refund forward. An overpayment credited to next year counts toward your first installment.
• Recalculate mid-year. A good spring may mean raising your September and January payments. A slow year may let you cut them.
• Keep records with your bookkeeping so you can estimate from real profit, not from bank deposits.

Want the deductions side of the equation? Our guide to small business tax deductions for 2026 covers what lowers that net-profit number in the first place.

Written by the Timeless Tax & Accounting teamTimeless Tax & Accounting was founded in 2020 by Nagham Alobaidi and serves clients across Virginia and in other states, in English and Arabic. Reviewed for accuracy against IRS and Virginia Tax guidance as of October 2, 2026.

This page is general information, not tax, legal or financial advice for your specific situation. Tax rules change often — talk with a professional before acting.