Side Income Taxes: Quarterly Estimated Payments Explained
Who has to pay during the year, the four dates, and how to avoid a penalty.
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When you work a job, tax comes out of each paycheck. Side income usually has nothing taken out, and that can mean a surprise bill and a penalty in April. Estimated payments fix that by paying as you go. Here is how they work.
Key takeaways
- If you expect to owe $1,000 or more in tax for the year after withholding and credits, the IRS generally expects you to pay during the year.
- You can avoid the penalty by paying enough, not exact: 90% of this year's tax or 100% of last year's usually works.
- Pay online for free. You do not need a form to send a check.
Who needs to pay
The IRS says people, including sole proprietors, partners and S corporation shareholders, generally make estimated payments if they expect to owe $1,000 or more when they file. Freelance, gig, rental and investment income can all count.
If you have a regular job as well, you can sometimes skip estimated payments by raising the tax withheld from your paycheck. Check the IRS guide first.
The four due dates for 2026 income
The IRS lists these dates for estimated payments:
- April 15, 2026: income from January 1 to March 31.
- June 15, 2026: income from April 1 to May 31.
- September 15, 2026: income from June 1 to August 31.
- January 15, 2027: income from September 1 to December 31.
The periods look uneven, and that is how the IRS sets them. If you have already missed a date this year, pay as soon as you can, because the penalty grows with the time a payment is late. Dates move when they fall on a weekend or holiday, so confirm on IRS.gov before you pay.
How to avoid the penalty
You generally avoid a penalty for underpayment if you owe less than $1,000, or you paid at least 90% of this year's tax, or 100% of last year's tax shown on your return. Higher earners may need a larger share of last year's tax, so check the IRS rules for your income.
That means you do not need a perfect forecast. You need a safe target.
Five steps to set it up
- Estimate your tax for the year. Use last year's return as a starting point and add what you expect from side income.
- Split it into four. Divide the total by four to get a payment per date.
- Open a separate savings account. Move a share of each side income payment into it as soon as it arrives. Treat that money as spoken for.
- Pay on time. Use your IRS online account, Direct Pay, the IRS app, or a Form 1040-ES voucher by mail.
- Keep a record. Save the confirmation for each payment to use on your return.
Think of it like a sinking fund for tax. Small, regular deposits mean the bill is already covered when it lands.
Common mistakes
- Forgetting the fourth payment. It is due in January, after the year ends.
- Spending the tax money. Keep it apart from everyday cash.
- Paying too little, then too late. The penalty is based on how much was short and for how long.
- Not counting self employment tax. Side income can carry Social Security and Medicare tax as well as income tax. Ask the IRS or a tax pro how it applies.
Your checklist for this week
- ☐ Total your side income so far this year.
- ☐ Find last year's total tax on your return.
- ☐ Pick your safe target: 90% of this year or 100% of last year.
- ☐ Open a separate savings account for tax money.
- ☐ Put the January 15 date in your calendar, and create a free IRS online account.
Also see our year end money review for what else to check before December 31.
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This is general education, not personalized financial advice or tax advice. Rules and dates change, so check IRS.gov or a tax professional for your situation.
