Quarterly estimated taxes: how much to set aside and when to pay in 2027
Nobody withholds tax from your business profit, so you are your own payroll department. Four dates, two safe harbours and one honest percentage decide whether you pay a penalty at all — and whether April brings a bill you saw coming.
Employees get tax taken out of every paycheque. Freelancers, sole proprietors, landlords and owners of partnerships or S corporations get a full payment — and a tax bill that was due in instalments all year. The IRS is not asking for a lump sum in April. It is asking for the tax as you earn the income, and it charges interest-style penalties when you don’t.
This guide answers three questions in order: do you have to pay, how much, and when. It is written on October 28, 2026 — before the first 2027 payment is due — so you can set the plan up while it is still cheap to do so.
2. How much? Income tax plus self-employment tax, minus what is withheld. The calculator below turns it into a percentage of profit.
3. When? April 15, June 15, September 15 and January 18, 2028 — four dates, but not four equal periods.
The rules, one question at a time
Under IRC §6654 (as the IRS explains it in the 2026 Form 1040-ES instructions, the latest published), you generally must pay estimated tax if both of these apply:
- You expect to owe at least $1,000 for 2027 after subtracting withholding and refundable credits; and
- Your withholding and refundable credits will be less than the smaller of (a) 90% of your 2027 tax or (b) 100% of your 2026 tax. Your 2026 return must cover all 12 months.
Two adjustments: if your 2026 adjusted gross income was over $150,000 ($75,000 if married filing separately), use 110% instead of 100% in (b). And if at least two-thirds of your gross income is from farming or fishing, use 66⅔% instead of 90% in (a).
“Tax” here is the whole bill — income tax and self-employment tax (15.3% on 92.35% of net earnings, with the Social Security part stopping at the 2027 wage base of $192,300). That is why self-employed people are so often surprised.
For a calendar-year individual, the due dates for 2027 are:
| Installment | Due date | Income period (cumulative, as used in Form 2210 Schedule AI) |
|---|---|---|
| 1st | April 15, 2027 | Jan 1 – Mar 31 (3 months) |
| 2nd | June 15, 2027 | Jan 1 – May 31 (5 months) |
| 3rd | September 15, 2027 | Jan 1 – Aug 31 (8 months) |
| 4th | January 18, 2028 (Jan 15 is a Saturday; Jan 17 is a federal holiday) | Jan 1 – Dec 31 (12 months) |
Notice that the periods are unequal: counted as new months, the second instalment covers only two (April and May) and the fourth covers four (September to December). That uneven shape is why a lumpy year can trip the penalty even when you pay a fair share overall.
- Skip the January payment? You don’t need the final payment if you file your 2027 return by January 31, 2028 and pay the whole balance with it.
- Weekends and holidays. If a due date falls on a Saturday, Sunday or legal holiday, the payment is on time if made the next business day. That is why the fourth 2027 instalment is due on Tuesday, January 18, 2028.
- How to pay. IRS online account, IRS Direct Pay or EFTPS are free. Card and digital-wallet payments carry a processing fee. Don’t mail cash, and the IRS doesn’t send reminders.
You owe no underpayment penalty if your withholding and timely estimated payments reach the “required annual payment”, paid in four equal parts. That amount is the lower of:
- 90% of your 2027 tax — the current-year test. It needs a forecast.
- 100% of your 2026 tax (110% if 2026 AGI was over $150,000) — the prior-year test. It needs only last year’s return, so it is the easy one when income is growing.
There is also an exception when the amount you owe after withholding is under $1,000, and one when you had no tax liability in the prior year (a full 12-month year as a US citizen or resident).
What the penalty costs
The penalty works like interest on each shortfall for the days it stayed unpaid. The IRS underpayment rate is reset every quarter (it is 7% for the quarter that started October 1, 2026; the 2027 rates aren’t announced yet). It is worked out installment by installment, so a late fourth payment does not erase the penalty on a missed first one.
The IRS can waive the penalty in some cases, for example retirement after age 62, disability, or a casualty or other unusual circumstance.
If your income is seasonal, or you had a large gain or contract late in the year, equal quarterly payments can overstate what you owed early on. The annualized income installment method (Form 2210, Schedule AI) lets you base each required installment on the income actually earned up to that date, which can reduce or eliminate some installments.
- You attach Form 2210 with Schedule AI to your return, and the schedule measures income cumulatively to the end of March, May, August and December. Keep records that support the figures.
- It helps most when income arrived in the second half of the year.
- It is a tool for the return, not a reason to skip paying: the safe harbours are easier to rely on when you can afford them.
Nonresident aliens (Form 1040-ES(NR))
- With wages subject to US withholding: the same four dates as above, or pay everything by April 15.
- Without wages subject to US withholding: three payments — 50% by June 15, 25% by September 15 and 25% by January 15 of the following year (next business day if a weekend or holiday) — the schedule in the 2026 Form 1040-ES(NR). Check it against the 2027 form when it is published.
Corporations
A corporation generally pays estimated tax if it expects to owe $500 or more, in instalments due the 15th day of the 4th, 6th, 9th and 12th months of its tax year — April 15, June 15, September 15 and December 15, 2027 for a calendar year. A foreign-owned US company taxed as a C corporation follows this rule, not the individual one.
Partnerships and S corporations
The profit is taxed to the owners, so the owners make their own estimated payments. The entity generally doesn’t pay federal income tax itself. Many states have their own estimated-tax dates and rules, which this guide does not cover.
Try it: how much should you set aside?
Enter your expected 2027 numbers. The planner estimates your federal bill, turns it into a percentage of profit you can transfer each time you get paid, and shows the safe-harbour amount and your instalment schedule.
| Estimated 2027 federal tax | Amount |
|---|
| Installment | Amount | Status |
|---|
What the numbers usually show
- “Set aside 25–30%” is a rule of thumb, not a rule. It is a decent starting point, but the planner shows the real figure moves with income, filing status and other income on the return. It can be well under or well over.
- The self-employment tax is the surprise. At modest profits it can be as large as the income tax itself.
- The prior-year test is easier but can overpay. If this year’s income fell, paying 100% or 110% of last year’s tax is more than the 90% test requires.
- Set aside separately. Moving the percentage into its own account on payday means the money is there on the due date.
I’m behind: what do I do now?
First, work out your required annual payment (the planner does this). Then:
1. Pay as soon as you can. The penalty runs on each shortfall for the days it stayed unpaid, at the quarter’s underpayment rate (reset every quarter). Waiting until the final instalment doesn’t cancel the penalty on the earlier instalments.
2. Use withholding if you can. If you or your spouse are employed, a higher W-4 withholding for the remaining paycheques counts as paid in equal parts across the year.
3. Check the annualized method. If most of your profit came late in the year, Schedule AI may show smaller early installments.
4. Consider the January 31 route. Filing your 2027 return by January 31, 2028 and paying in full means the final instalment isn’t needed.
The planner shows the payments you have made against each instalment and any shortfall, so you can see where the penalty is likely to build. It doesn’t compute the penalty itself — Form 2210 does.
What this planner doesn’t capture
A real forecast also involves credits (for example child-related credits), capital gains, rental and investment income, retirement contributions, health-insurance deductions, state tax and the net investment income tax. It models one return with one source of self-employment income. Treat the output as an estimate to refine each quarter, not a figure to file.
Common mistakes
- Paying only income tax. The estimate must include self-employment tax.
- Assuming the prior-year safe harbour applies. It needs a full 12-month 2026 return, and 110% if 2026 AGI was over $150,000.
- Treating the quarters as equal. The new income in each period is 3, 2, 3 and 4 months, but the instalments are due as four dates.
- Waiting for the return. A full payment with the return doesn’t remove the penalty for the earlier due dates.
- Forgetting the state. Most states with an income tax have their own estimated-payment calendar.
- Using the individual dates for a company. A C corporation’s dates are April 15, June 15, September 15 and December 15.