💰 Money School
Quarterly Estimated Taxes
Learn what quarterly estimated taxes are, who actually has to pay them, and how to estimate and send them so you avoid penalties and a scary bill in April.
What you will learn
- 1Beginner: What Estimated Taxes AreFree 6 min
- 2Intermediate: Estimating and Paying Them🔒 9 min
- 3Advanced: Dialing It In and Avoiding Penalties🔒 9 min
Beginner: What Estimated Taxes Are
Why they exist
The United States tax system is pay-as-you-go. When you have a job, your employer withholds tax from each paycheck and sends it in for you all year long.
When you work for yourself, no one does that. So the IRS asks you to estimate what you will owe and pay it in installments during the year instead of all at once at the end.
Estimated tax, defined
An estimated tax payment is money you send the IRS during the year toward the taxes you expect to owe, including income tax and self-employment tax.
Think of it as doing your own withholding. You are the boss now, so you handle the part your old employer used to handle quietly in the background.
Who usually has to pay
Generally, if you expect to owe more than a small amount when you file, the IRS expects you to make estimated payments during the year. Many self-employed people and side-hustlers fall into this.
The exact threshold and rules change, so check irs.gov or ask a CPA to confirm whether you personally need to pay them.
Do this before lesson 2
- ✓Say back why estimated taxes exist: the system is pay-as-you-go.
- ✓Ask yourself if you expect to owe tax this year with nothing being withheld.
- ✓Check irs.gov or ask a CPA whether you are required to pay estimates.
Create your free account to unlock all lessons
You just finished lesson 1. The other 2 lessons in this course are ready for you. Create a free account to continue, then unlock the full course for $49 (or take the whole Money School for $177).
Full course $49. First lesson stays free, always.