Quarterly Estimated Tax
taxAlso known as: estimated tax, quarterly taxes, estimated tax payments
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
Form 1040-ES is the federal estimated tax payment voucher; most filers pay online via IRS Direct Pay or EFTPS. Quarterly amounts based on projected annual tax liability ÷ 4 (with adjustments for uneven income). Safe harbor to avoid underpayment penalty: pay at least 100% of prior year tax (110% if AGI > $150K) OR 90% of current year tax. Most states also require quarterly estimated payments (California, New York, etc.). Underpayment penalty is calculated on Form 2210 — equivalent to interest on the unpaid amount at the IRS short-term federal rate + 3%. Common pitfall for new self-employed contractors who don't realize they need to pay quarterly.
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Related tax terms
Adjusted Gross Income (AGI)
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Modified Adjusted Gross Income (MAGI)
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Standard Deduction
The standard deduction is a fixed dollar amount that reduces your taxable income. For 2026, it's $16,100 single, $32,200...
Marginal Tax Rate
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Effective Tax Rate
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