Quarterly estimated taxes on side income: dates & rules

Your day job takes tax out of every paycheck. Your side gig doesn't. Nobody withholds on a 1099 payment or a payment-app transfer, so the IRS expects you to send that tax in yourself, during the year, not just in April. Miss it and you can owe a penalty that works like interest, on top of the tax.

This guide is about when and how to pay. For how much to set aside from each payment, see our side income tax guide.

Who has to pay estimated tax?

According to the 2026 Form 1040-ES instructions, you generally must make estimated payments if both of these are true:

1. You expect to owe at least $1,000 in federal tax for 2026 after subtracting your withholding and refundable credits.
2. Your withholding and refundable credits will be less than the smaller of 90% of your 2026 tax, or 100% of the tax on your 2025 return (a full 12-month return).

The second test is the safe harbor, covered below. The tax here includes self-employment tax as well as income tax, which is why a side gig crosses the $1,000 line sooner than people expect. Farmers and fishermen have separate, looser rules.

When are the 2026 payments due?

The year is split into four uneven periods. Each payment covers income from its period:

All four 2026 dates fall on weekdays. When a due date lands on a Saturday, Sunday or legal holiday, the IRS treats a payment on the next business day as on time. Two more dates matter early in 2027:

• February 1, 2027: if you file your 2026 return by this date and pay the full balance with it, you can skip the January 15 payment (January 31 is a Sunday, which is why the form says February 1).
• The normal April filing deadline: whatever you still owe for 2026 is due with the return. Any penalty is figured up to that date or the date you pay, whichever comes first.

Notice that the second period is only two months long and the last one is four. If side money comes in steadily, the June payment covers less income than the others.

How do the safe-harbor rules work?

You don't have to predict your tax to the dollar. You avoid the underpayment penalty if your withholding plus timely estimated payments reach the smaller of:

• 90% of your 2026 tax, or
• 100% of your 2025 tax. If your 2025 adjusted gross income was more than $150,000 ($75,000 if married filing separately for 2026), use 110% instead (Form 1040-ES).

The prior-year test is the easy one, because the number is already printed on last year's return. If your side income is growing, it also lets you pay less during the year; you settle the rest in April without a penalty.

Each quarter is checked separately. The IRS generally expects about a quarter of the required amount by each due date, and an early shortfall can be penalized even if you catch up later (Instructions for Form 2210). The exception is withholding, which the next section covers.

Can I raise my W-4 withholding instead?

Yes. If you have a W-2 job, you can give your employer a new Form W-4 and enter an extra amount to withhold from each paycheck in Step 4(c) (Publication 505). The IRS's estimated tax page names this as a way to avoid estimated payments altogether.

Withholding has one big advantage: unless you choose otherwise, it is treated as paid in equal parts on each due date, no matter when during the year it was actually taken out (Instructions for Form 2210). So if you notice in the fall that you're behind, raising withholding for the last few paychecks can cover the earlier quarters too. A late estimated payment can't do that; it only counts from the day you pay.

The trade-off is smaller paychecks. Our guide to reading your pay stub shows where the extra withholding will appear, so you can check it took effect.

A worked example: a day job plus $15,000 on the side

Say you're a W-2 employee whose job withholds about $6,200 a year, roughly the tax on your wages. Your side gig started in 2025, and your 2025 return showed $8,000 of total tax, with AGI under $150,000. In 2026 the gig makes $15,000 in profit, taxed at a 12% marginal rate.

Withholding alone leaves you $1,800 short of the safe harbor. You can close the gap three ways:

• Four estimated payments of $450 each on the dates above.
• Extra withholding for the whole year of about $69.23 per paycheck on Step 4(c), if you're paid every two weeks.
• A late-year catch-up: with 5 paychecks left in the year, about $360 extra per paycheck. Because withholding is spread evenly across the year, this still covers the earlier quarters.

Either way you'll still owe about $1,992 when you file, since the safe harbor is based on last year's lower tax. That's no penalty, but it's a real bill, so keep setting money aside. To owe nothing in April you would need to cover the full $9,992.

How big is the underpayment penalty?

The penalty is figured separately for each quarter: the amount you were short, times the IRS underpayment interest rate, for the number of days it stayed unpaid (Instructions for Form 2210). The rate is the federal short-term rate plus 3 percentage points and is reset every quarter. For October through December 2026 it is 7% a year (IR-2026-98); it was 6% from April through June 2026.

If the person in our example paid nothing extra, each installment would be short by $450 if the balance is paid with the return on April 15, 2027:

About $83. Not ruinous, but it's money for nothing, and it grows with the shortfall and the time. Form 2210 is how you check whether you owe it and figure the amount. The IRS can waive it in limited cases, such as a casualty or disaster, or if you retired after age 62 or became disabled and had reasonable cause (Topic 306).

How do I actually pay?

1. Work out your safe-harbor target from last year's return and this year's estimate. The worksheet in Form 1040-ES walks through it.
2. Pick a route: estimated payments, extra W-4 withholding, or a mix.
3. For estimated payments, pay online, by phone or in the IRS app (your IRS Online Account shows your payment history), or mail a check with a Form 1040-ES voucher.
4. Put the four dates in your calendar and move money into a separate tax account as side income arrives.
5. At tax time, list the estimated payments on your return so they're credited.

Weighing a full move to contract work? Our W-2 vs. 1099 guide shows why the same rate is worth less without an employer.

Assumptions: $15,000 of 2026 net side profit, a 12% marginal federal rate, half of self-employment tax deducted, $6,200 of tax on wages fully covered by $6,200 of withholding, $8,000 of total 2025 tax with AGI under $150,000, no refundable credits, no state tax, biweekly pay. Penalty uses IRS rates of 6% (Q2 2026) and 7% (other 2026 quarters) and assumes 7% in 2027, paid in full April 15, 2027.

Common questions

Do I have to pay estimated tax if my side income is small?

Not if you expect to owe less than $1,000 for the year after subtracting your withholding and refundable credits. You still report the income on your return either way.

Do the four payments have to be equal?

The IRS generally suggests four equal payments. If your side income arrives unevenly, the annualized installment method on Form 2210 can lower or remove a penalty for quarters when you earned little.

Can I skip the January 15, 2027 payment?

Yes, if you file your 2026 return by February 1, 2027 and pay the whole balance due with it, according to the 2026 Form 1040-ES instructions.

Is withholding better than quarterly payments?

It is often simpler for people with a day job. Withholding is treated as paid evenly through the year unless you show otherwise, so extra withholding late in the year can still cover earlier quarters. Estimated payments count on the date you make them.

Will I get a penalty even if I'm due a refund?

It can happen. The IRS notes a penalty can apply if estimated payments were late, even when you end up with a refund, because each quarter is checked on its own.

This article is general education, not personal financial advice. Figures in worked examples are calculated from the assumptions stated with them and are not forecasts.