If your business doesn't have taxes withheld from a paycheck, the IRS expects you to pay estimated taxes four times a year — not once at filing time. Missing or underpaying these can trigger penalties even if your full tax bill is eventually paid.
The safest approach for most growing businesses is the 'safe harbor' method: pay at least 100% of last year's tax liability (110% if your income was above $150,000) spread across the four due dates. This protects you from underpayment penalties regardless of how this year performs.
Quarterly due dates typically fall in mid-April, mid-June, mid-September, and mid-January of the following year. Because Q2's deadline sits only two months after Q1's, it's easy to lose track — we set calendar reminders for every client 10 days ahead of each due date.
If your income is highly seasonal, the 'annualized income installment method' can reduce what you owe in slower quarters — though it requires more detailed recordkeeping. This is exactly the kind of calculation we build into quarterly planning calls with clients.
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