Estimated tax
How to calculate estimated tax payments for 2026
An estimated tax payment is one quarter of the tax you expect to owe on income nothing is withheld from. For a self-employed person that means income tax plus 15.3% self-employment tax. A single freelancer with $60,000 of profit in 2026 owes about $12,040 in federal tax, or roughly $3,010 a quarter. Paying at least last year’s tax, in four equal parts, keeps you clear of the penalty even if this year’s income is higher.
The short answer: two ways to pick the number
The easy way is last year’s tax. Take the total tax on your 2025 return, divide it by four and pay that on each due date. If your 2025 adjusted gross income was over $150,000 ($75,000 if married filing separately), use 110% of it. Paid on time, this avoids the underpayment penalty even if you end up owing more in April.
The precise way is this year’s tax. Estimate your 2026 income and work out the tax, as below, then pay at least 90% of it over the four installments. This is the better choice when your income is falling, because last year’s tax would make you overpay.
Step by step for the self-employed
The IRS version of this is the worksheet in Form 1040-ES. If you have a W-2 job too, your withholding counts toward the total, and asking your employer to withhold more on a new Form W-4 can replace separate payments.
- Estimate your 2026 net profit: income minus business expenses, as it will appear on Schedule C.
- Self-employment tax: multiply the profit by 92.35%, then by 15.3%. The 15.3% is 12.4% Social Security, on earnings up to $184,500 in 2026, plus 2.9% Medicare with no cap. No self-employment tax is due if net earnings are under $400.
- Subtract half of the self-employment tax from your income to get adjusted gross income, along with any other adjustments such as SEP or solo 401(k) contributions and self-employed health insurance.
- Subtract the standard deduction ($16,100 single, $32,200 married filing jointly, $24,150 head of household for 2026) or your itemized deductions, and the 20% qualified business income deduction if you qualify.
- Figure income tax on what is left with the 2026 tax brackets, then subtract credits such as the child tax credit.
- Add income tax and self-employment tax, subtract any withholding you expect, and divide by four.
Worked example: $60,000 of profit, single
That is about 20% of profit. The share rises with income: above $50,400 of taxable income a single filer’s next dollars are taxed at 22% plus self-employment tax.
If the same person’s total 2025 tax was $9,000 and their 2025 AGI was under $150,000, four payments of $2,250 would be enough to avoid a penalty. The other $3,037 would be due by April 15, 2027.
| Step | Amount |
|---|---|
| Net profit | $60,000 |
| Self-employment tax ($60,000 × 92.35% × 15.3%) | $8,478 |
| Adjusted gross income (profit minus half the SE tax) | $55,761 |
| Standard deduction | −$16,100 |
| QBI deduction (20%, limited by taxable income) | −$7,932 |
| Taxable income | $31,729 |
| Income tax (10% of $12,400 + 12% of the rest) | $3,559 |
| Total federal tax | $12,037 |
| Each of four payments | About $3,010 |
Illinois estimated tax
Illinois has its own estimated payments, on Form IL-1040-ES, due on the same four dates as the federal ones. You need them if you expect your 2026 Illinois tax to be more than $1,000 after withholding and credits.
The tax is a flat 4.95% of income after the $2,925 per-person exemption for 2026. In the example above, $55,761 less $2,925 is $52,836, and 4.95% of that is about $2,615, or roughly $654 a quarter. Self-employment tax is federal only.
When and how to pay
For 2026 income the installments are due April 15, June 15 and September 15, 2026, and January 15, 2027. The full calendar, including 2027, and what happens if you pay late are on our estimated tax due dates page.
Pay through IRS Direct Pay or your IRS Online Account at no cost, through EFTPS, by card for a fee, or by check with the 1040-ES voucher. Keep a record of each payment; you will list the total on your return.
Get your quarterly payments worked out
USTAXX figures federal and Illinois estimated payments for freelancers, drivers and small business owners, and adjusts them when income changes. In Naperville, IL, or remotely.
Questions people ask
How much should I pay in estimated taxes?
At least the smaller of 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 AGI was over $150,000), split into four payments. For the self-employed, the 2026 tax includes 15.3% self-employment tax on 92.35% of profit.
What percentage of income should I set aside for quarterly taxes?
It depends on income and deductions. In our 2026 example, a single filer with $60,000 of profit owes about 20% in federal tax, plus about 4.4% for Illinois. Higher earners owe a larger share.
Do I have to pay estimated taxes in my first year of self-employment?
If you had no tax liability for 2025, you do not have to pay 2026 estimated tax to avoid the penalty. Otherwise paying 100% of your 2025 tax is a safe target, even if your new income is higher.
Can I make one estimated payment instead of four?
You can pay the whole year by the first due date. Paying it all in January does not work: each installment is judged separately, so earlier ones would be late.
What if my income changes during the year?
Refigure the remaining payments with the new estimate. If income came late in the year, the annualized income method on Form 2210 Schedule AI can lower the earlier installments.
Where these rules come from
- IRS: Form 1040-ES, Estimated tax for individuals (2026)
- IRS Rev. Proc. 2025-32: 2026 brackets and standard deduction
- IRS: Self-employment tax
- IRS: Estimated taxes
- Illinois Department of Revenue: Form IL-1040-ES
General information, current when written, not advice about your situation. Fees and forms change; the official pages above are the authority.