Employees pay tax through their paycheck. In several countries, freelancers pay during the year instead, in installments. In the US these are quarterly estimated tax payments, and missing them can mean interest and penalties.
US due dates
The IRS schedule has four payments: around April 15, June 15 and September 15, and January 15 of the following year. When a date falls on a weekend or holiday, it moves to the next business day. Other countries have their own schedules, so check your tax authority.
Estimating each payment
Start with the share of every payment you set aside for tax, then multiply by your expected quarterly income.
Profit share
100% − 15%equals85%
Set-aside rate
85% × (12% + 14.1%)equals22.19%
From this payment
$2,000.00 × 22.19%equals$443.70
At $6,000 of income a month, that is about $3,993 a quarter. Your actual payment depends on your full-year estimate, deductions and credits, so treat the set-aside as the money you keep ready, then pay what your estimate requires.
Habits that make it easy
- Move the set-aside share into a separate account the day a client pays.
- Recalculate if your income changes a lot mid-year; payments can be adjusted.
- Keep records of every payment you make, so they are credited against your annual return.
Tip: This is a planning method, not tax advice. An accountant can confirm your required payments and any safe-harbor rules that apply to you.