Self Employed Taxpayers: What to Know Before the Next Estimated Tax Payment

Self-employed taxpayers should review income, business expenses, prior tax payments, withholding, and changes in their financial situation before making the next estimated tax payment. For 2026, the third estimated-tax payment period covers June 1 through August 31, with a September 15, 2026, due date for most calendar-year taxpayers. Estimated tax generally covers both federal income tax and self-employment tax.

The safest approach is to recalculate rather than automatically repeat the previous payment. A midyear increase or decrease in business income, a major deduction, a new source of income, or a change in withholding can affect the required amount. The following process reflects the practical review steps used when preparing estimated-tax calculations and reconciling self-employment income.

Table of Contents

1. Understand Your Estimated Tax Obligation

2. Know the Key Estimated Tax Dates

3. Calculate the Next Payment Accurately

4. Account for Income That Changes During the Year

5. Review Deductions and Tax Adjustments

6. Avoid Common Estimated Tax Mistakes

7. Compare Ways to Manage Estimated Payments

8. Consider These Factors Before Making Your Payment

9. Common Questions Before Making an Estimated Tax Payment

10. How Ongoing Tax Planning Supports Self Employed Taxpayers

11. Questions That Matter After You Start Making Estimated Payments

12. Keep Your Estimated Tax Plan on Track

13. Get Help Reviewing Your Tax Position

Check the Next Estimated Tax Deadline

The IRS divides the year into four estimated-tax payment periods. Missing an installment or paying too little for a period can result in an underpayment penalty, even if the taxpayer ultimately receives a refund when filing the annual return.

For most self-employed calendar-year taxpayers, the September 15 payment deserves particular attention because it follows the summer business cycle and provides a useful opportunity to compare actual year-to-date results with the original annual estimate.

Recalculate Income Before Paying

Do not base the next payment solely on last year's tax return. The IRS allows taxpayers to recalculate estimated tax when income, deductions, credits, or other circumstances change during the year.

Start with year-to-date business revenue. Then subtract legitimate business expenses and account for other taxable income, deductions, and applicable credits. Include self-employment tax in the calculation rather than treating it as a separate issue.

Bonus tip: Compare the current year-to-date profit with the same period from the prior year. A large difference is a signal to revisit the estimated-tax calculation rather than simply repeating an old installment.

Account for Self Employment Tax

Self-employed individuals generally use estimated tax to cover both income tax and Social Security and Medicare taxes because there is no employer withholding these amounts from business income. The IRS directs self-employed taxpayers to Form 1040-ES when determining their estimated obligations.

The 2026 IRS estimated-tax worksheet uses expected net self-employment earnings to calculate self-employment tax. The calculation also considers the applicable Social Security wage base and the deduction for part of self-employment tax.

This makes accurate bookkeeping especially important. An incomplete income or expense record can affect more than one part of the estimated-tax calculation.

Adjust When Business Income Changes

A fixed quarterly amount works best when income remains relatively stable. Self-employed taxpayers often experience uneven revenue, especially when work follows seasonal demand, contracts, project schedules, or industry cycles.

The IRS states that taxpayers should refigure estimated tax when changes in income, adjustments, deductions, or credits affect the calculation. If income is uneven throughout the year, the annualized income installment method may produce different required payments for different periods.

Bonus tip: Keep a running estimated-tax worksheet throughout the year. Updating it after major financial changes is easier than reconstructing several months of activity immediately before a deadline.

Use the Prior Year as a Guide

The prior year's return remains useful, but it should serve as a starting point rather than a final answer.

For 2026, the IRS generally uses the smaller of 90% of expected current-year tax or 100% of the prior year's tax when determining the required annual payment under the general rule. Higher-income taxpayers may need to use 110% of the prior year's tax under the applicable rule.

These methods can produce different results, so the appropriate approach depends on the taxpayer's income pattern and circumstances.

Avoid Common Estimated Tax Mistakes

Several problems repeatedly create inaccurate estimated-tax calculations:

• Using gross business revenue instead of net business income

• Forgetting self-employment tax

• Ignoring income from investments or other sources

• Failing to record estimated payments already made

• Assuming every quarter requires the same payment

• Waiting until the annual return to discover major income changes

The IRS notes that taxpayers can make estimated payments more frequently, provided sufficient tax has been paid by the applicable quarterly deadline.

Consider These Factors Before Making the Next Payment

Before submitting the next estimated tax payment, review the following:

For taxpayers in states with separate income-tax systems, federal planning should not automatically be treated as a complete state tax review.

Common Questions Before Making an Estimated Tax Payment

Can the next payment differ from the previous one

Yes. Changes in income, deductions, credits, or withholding can require a revised calculation.

Can self-employed taxpayers pay estimated tax monthly

Yes. The IRS permits more frequent payments as long as enough tax is paid by the applicable quarterly deadline.

What happens if business income is unpredictable

Consider the annualized income installment method. It can account for uneven income instead of assuming that earnings arrive evenly throughout the year.

Do estimated payments cover self-employment tax

Generally, yes. Estimated tax is used to pay both federal income tax and self-employment tax for self-employed individuals.

Keep Better Records Between Payments

Estimated-tax planning becomes easier when bookkeeping stays current. Track revenue and expenses consistently, reconcile business accounts, preserve supporting documents, and maintain a record of every estimated payment.

The IRS also allows taxpayers to review payment history and other tax records through an online account, which can help identify discrepancies between personal records and federal payment records.

Services That Support Ongoing Tax Planning

• Business Tax Services: Supports accurate reporting of business income, deductions, and tax obligations.

• Individual Tax Services: Helps coordinate personal tax reporting when business income flows onto an individual return.

• Bookkeeping Services: Keeps income, expenses, and financial records organized for more reliable tax calculations.

• Controller & CFO Services: Provides broader financial oversight when business owners need ongoing reporting and planning support.

Keep Your Next Payment Based on Current Numbers

Estimated tax works best as an ongoing process rather than a quarterly guess. Review actual business performance, update the annual projection, account for self-employment tax, verify previous payments, and adjust the remaining installments when circumstances change.

For questions about organizing records or reviewing an estimated-tax position, We Do Taxes can be reached at info@wedotaxes.co or (681) 331-8110.