What are Estimated Taxes?
Unlike employees who have taxes withheld from every paycheck, self-employed individuals must pay taxes in four quarterly installments. This covers both income tax and self-employment/national insurance contributions.
US Quarterly Due Dates
- **Q1 (Jan 1 - Mar 31):** Due April 15
- **Q2 (Apr 1 - May 31):** Due June 15
- **Q3 (Jun 1 - Aug 31):** Due September 15
- **Q4 (Sep 1 - Dec 31):** Due January 15 (following year)
Calculating the Safe Harbor Rule
To avoid underpayment penalties in the US, you must pay at least:
1. **90%** of the tax you owe for the current tax year, or
2. **100%** of the tax shown on your return for the prior year (110% if prior AGI was over $150,000).