Managing taxes as a small business owner or self-employed individual can feel like a full-time job. One crucial element of this is understanding quarterly tax payments—when they’re due, who must pay them, and how to avoid penalties.

If you’re tired of being caught off guard by tax deadlines, this blog will walk you through Jamie Trull’s straightforward guide on how to manage quarterly taxes, estimate how much to pay, and streamline the process.

Whether you’re a sole proprietor, LLC, or S-Corp owner, we’ll cover everything you need to know so you stay compliant and penalty-free.

Plus, there’s a handy video linked below with even more insights.

What Are Quarterly Taxes?

Quarterly estimated taxes are prepayments made toward your total annual tax bill. They cover federal income tax, Social Security, and Medicare (or self-employment) taxes.

For salaried employees, these taxes are automatically withheld by their employer. However, as a small business owner or freelancer, the responsibility to withhold taxes falls on you.

Your quarterly payments act as installments throughout the year to prevent a hefty tax bill in April. If you fail to pay enough throughout the year, the IRS can hit you with underpayment penalties—and that’s never fun!

Who Needs to Pay Quarterly Taxes?

Not every business owner needs to pay quarterly estimated taxes. Here are the primary factors to determine if you need to pay:

• Profitability: If you’re not profitable, you won’t owe taxes. Taxes are based on profit (revenue minus deductible expenses).
• Federal Tax Liability of $1,000 or More: If you expect to owe at least $1,000 in federal taxes for the year, you should pay quarterly taxes.

Jamie emphasizes that it’s important to consider your entity type:

• Sole Proprietors and LLCs: You’re responsible for estimated taxes if your business generates profit.
• S-Corporations: Owners who pay themselves a reasonable salary through payroll will have taxes withheld, but you still need to cover any additional profits through estimated taxes.
• Not Profitable? No taxes are due. You only owe taxes on profit, so if you are at a loss or just breaking even, quarterly payments may not be necessary.

Benefits of Paying Quarterly Taxes

Making quarterly payments comes with several benefits:

1. Avoiding Penalties: The IRS imposes underpayment penalties if you don’t make estimated payments on time.
2. Cash Flow Management: Paying quarterly helps you spread out your tax obligations, so you’re not left with a massive bill in April.
3. Potential Refunds: If you overpay throughout the year, you’ll receive a refund when you file your return.

How Much Should You Pay?

Figuring out how much to pay can be a challenge, especially with variable income. Jamie explains two strategies you can use to stay penalty-free under the IRS’s safe harbor rules:

• 100% of Last Year’s Tax Liability: If you pay at least what you owed last year, you’ll avoid penalties—even if your income increases this year.
• 90% of This Year’s Taxes: If you expect your income to grow or change significantly, paying 90% of this year’s taxes might be the better option.

Using last year’s numbers is easier since you can pull them directly from your tax return. However, estimating for the current year can save you from overpaying and tying up cash unnecessarily.

💡 Pro Tip: Jamie recommends erring on the side of caution. If you’re unsure, aim to overpay slightly to avoid penalties and receive a refund later.

When Are Quarterly Taxes Due?

The IRS deadlines for quarterly taxes can be confusing. Here are the quarterly due dates:

• Q1: April 15 (covers January–March)
• Q2: June 15 (covers April–May)
• Q3: September 15 (covers June–August)
• Q4: January 15 of the following year (covers September–December)

The uneven distribution of months across the quarters can make calculations tricky. Jamie’s advice? Simplify the process by dividing your expected annual tax bill into four equal payments—even if the IRS quarters don’t match perfectly.

How to Avoid Late Fees

To avoid missing deadlines, Jamie suggests setting reminders. She personally uses Google Alerts a week before the payment is due to ensure she never forgets. Processing payments can take a few days, so pay early to avoid any last-minute stress.

How to Pay Your Quarterly Taxes

The easiest way to pay your quarterly taxes is through the IRS website.

It’s free, secure, and you avoid the hassle of mailing checks.

Jamie also emphasizes keeping records of your payments—you’ll need them when filing your return.

Searching through confirmation emails last-minute is never fun!

Bonus Tip for S-Corp Owners: Simplify Your Taxes with Payroll Withholding

If you run an S-Corp, you can avoid the quarterly payment hassle by withholding extra taxes from your payroll checks. As Jamie explains, since S-Corp owners must pay themselves a reasonable salary, you can adjust your W-4 to withhold additional amounts.

By doing this, you cover taxes on both your salary and any draws or profits from the business, eliminating the need for separate quarterly payments.

What If Your Finances Are a Mess?

If you’re unsure where to start with estimating your taxes, Jamie emphasizes the importance of getting organized. Here are a few quick tips:

1. Separate Business and Personal Finances: Use dedicated business bank accounts and credit cards to track income and expenses clearly.
2. Track Profit and Loss: A Profit and Loss Dashboard can help you see where you stand financially and how much profit you’re generating. If you need one, grab Jamie’s Profit and Loss Dashboard and Template.
3. Use a Tax Planning System: Jamie offers an Ultimate Tax Bundle that includes templates, tutorials, and tips to keep you organized and on top of your taxes.

Conclusion: Take Control of Your Taxes

Quarterly taxes might feel overwhelming at first, but with the right tools and strategies, you can stay ahead and avoid surprises. Whether you pay based on last year’s numbers or this year’s projections, the key is consistency.For more help getting organized and staying ahead of tax deadlines, check out Jamie’s Ultimate Tax Bundle. And if you’re ready to optimize your finances further, her Profit and Loss Dashboard will make tracking your income and expenses a breeze.

🎥 Watch the Full Video Here: Do You Need to Pay Quarterly Taxes? If so when and how?!

Full Video Transcript

Disclaimer: The following is a direct transcript of the video. It may contain conversational quirks or informal phrasing.

What the heck are quarterly tax payments, and how do you know if you’re supposed to pay them as a small business owner or self-employed individual? In this video, I’m going to break down who has to pay quarterly estimated taxes, how to pay them, and how to avoid the dreaded penalties.

Hi everyone, Jamie Trull here, CPA and financial literacy coach. My passion is helping you navigate the tricky waters of business finances and taxes. If you’re interested in getting your finances organized fast and saving on taxes, definitely make sure to subscribe to my channel because I release new videos every week to help you do just that.

Make sure you stay until the end of this video because I’ll be telling you about a simple plan of action to get your finances in order for tax time super quickly.

What Are Quarterly Estimated Taxes?

When we talk about quarterly estimated taxes, we mean installments made throughout the year toward the taxes you’ll owe on your federal tax return. These payments typically cover two things:

1. Income Taxes (those familiar income tax brackets you’ve heard of)
2. Social Security and Medicare Taxes (also known as payroll or self-employment taxes for the self-employed)

When you’re self-employed or running a small business, these taxes are not withheld automatically—unlike when you work for someone else as an employee. That makes you responsible for calculating and paying in your share through quarterly installments.

Who Has to Pay Quarterly Taxes?

If you’re receiving income through payroll from an employer, taxes are already withheld. But as a small business owner or freelancer, you’re often getting money pre-tax—meaning you need to handle withholding yourself.

Your entity type plays a role:

• Sole Proprietors and LLCs: If your business generates profit, you likely need to pay estimated taxes.
• S-Corps: You’ll be paying yourself a salary with some taxes withheld, but any owner draws or profits above that salary still require estimated taxes.

If you’re not profitable, you won’t owe taxes on those business earnings. The rule is simple—you only pay taxes on profit (your total revenue minus deductible expenses).

However, if you expect to owe at least $1,000 in federal taxes, you should plan to make quarterly estimated payments.

Why You Should Pay Quarterly Taxes

Paying quarterly taxes isn’t just about compliance—it helps with:

1. Avoiding Penalties: The IRS imposes underpayment penalties if you don’t make required estimated payments.
2. Cash Flow Management: Quarterly payments spread your tax obligation across the year, making it more manageable.
3. Refund Potential: If you overpay, you’ll receive a refund when you file your return.

💡 Pro Tip: If you’re constantly scrambling at tax time, grab Jamie’s Ultimate Tax Bundle to help you stay organized and reduce tax-time stress.

How Much Should You Pay?

The goal is to avoid underpayment penalties by meeting safe harbor rules. There are two primary options:

• Pay 100% of Last Year’s Tax Liability: This ensures you won’t get penalized, even if you owe more this year.
• Pay 90% of This Year’s Taxes: If you have a good estimate of this year’s income and deductions, you can aim for 90% of your current year’s liability.

Using last year’s numbers is simpler since you already have that information on your tax return. However, if you expect your business to grow this year, you may need to make adjustments or overpay to avoid penalties.

When Are Quarterly Taxes Due?

Here’s where it gets tricky—the IRS’s quarterly deadlines aren’t evenly distributed throughout the year:

• Q1: April 15 (covers January–March)
• Q2: June 15 (covers April–May)
• Q3: September 15 (covers June–August)
• Q4: January 15 (of the following year, covering September–December)

Jamie’s advice? Divide your estimated annual tax bill by four to simplify the process and ensure you’re covered.

If a payment deadline falls on a weekend or holiday, the due date shifts to the next business day. Jamie also recommends setting calendar reminders at least a few days before the due date to ensure you don’t miss a payment.

How to Make Quarterly Payments

The easiest way to pay your quarterly taxes is through the IRS website. It’s free, quick, and avoids the hassle of mailing checks.

💡 Pro Tip: Record all your payments and keep those records handy for tax filing. It’s easy to lose track, and you’ll need to report what you paid when filing your return.

Bonus Tip for S-Corp Owners

Jamie shares a time-saving strategy for S-Corp owners:

Since S-Corp owners must pay themselves a salary, Jamie withholds extra taxes from her payroll checks to cover taxes on any additional draws or profits. By adjusting her W-4, she ensures that her taxes are covered throughout the year, avoiding the need to make separate quarterly payments.

What If Your Finances Are a Mess?

If you’re unsure where to start or feel overwhelmed, Jamie offers a few key steps:

1. Separate Your Finances: Use a dedicated business bank account or credit card to track business income and expenses clearly.
2. Track Profit and Loss: Jamie recommends her Profit and Loss Dashboard and Template to simplify tracking and ensure you know where your business stands financially.
3. Use a Tax Planning System: Jamie’s Ultimate Tax Bundle offers templates, tutorials, and strategies to stay organized and reduce stress at tax time.

Conclusion: Stay Ahead of Your Taxes

Managing quarterly taxes might seem daunting, but it becomes easier with planning and the right tools. Whether you use last year’s numbers or estimate this year’s income, consistency is key to avoiding penalties.

To further streamline your finances and maximize your deductions, check out Jamie’s Ultimate Tax Bundle and her Profit and Loss Dashboard.