# Quarterly Estimated Taxes for Contractors: How They Work in 2026

Quarterly estimated taxes are the income tax and self-employment tax a contractor pays the IRS during the year because no employer withholds it. For tax year 2026 the payments are due April 15, June 15 and September 15, 2026, and January 15, 2027. You generally must pay if you expect to owe at least $1,000.

## Key takeaways

- For 2026 you generally owe estimated tax if you expect to owe $1,000 or more after withholding and refundable credits.
- You avoid the underpayment penalty by paying the smaller of 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 AGI was over $150,000).
- The four 2026 due dates are April 15, June 15, September 15, 2026 and January 15, 2027.
- Estimated payments cover self-employment tax as well as income tax, so they are bigger than most new owners expect.
- Seasonal trades can use the annualized income installment method to match payments to when the money actually comes in.

> **Which year these numbers are for**
>
> Every rule and figure on this page is for **tax year 2026**, taken from the 2026 Form 1040-ES package and IRS Publication 505 (2026), and checked on October 12, 2026. This is general information, not tax advice. Your CPA or enrolled agent should confirm what applies to you.

## What are quarterly estimated taxes?

Estimated tax is how you pay tax on income that nobody withholds from. When you work for a company, your employer holds back income tax, Social Security and Medicare from every paycheck. When you run your own plumbing, HVAC or roofing business as a sole proprietor or single-member LLC, nobody does that for you. The IRS still expects to be paid as you earn, so you send it money four times a year.

Those payments cover two different taxes: federal **income tax** on your profit and **[self-employment tax](https://www.brix.so/learn/self-employment-tax)**, the 15.3% Social Security and Medicare tax that self-employed people pay on their own. Most states with an income tax have their own estimated payments too. See your state's page under [state tax guides](https://www.brix.so/taxes).

## Who has to pay estimated taxes in 2026?

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

1. You expect to owe **at least $1,000** in tax for 2026 after subtracting your withholding and refundable credits.
2. You expect your withholding and refundable credits to be less than the **smaller of** (a) 90% of the tax on your 2026 return or (b) 100% of the tax on your 2025 return (your 2025 return must cover all 12 months).

There is one clean exception: if you were a U.S. citizen or resident for all of 2025 and had **no tax liability** for 2025, you don't have to pay estimated tax for 2026. That mostly helps people in their first profitable year.

Who this catches in the trades: owner-operators filing Schedule C, partners and LLC members whose share of profit isn't withheld on, and S corporation owners who take distributions on top of a small salary. If you or your spouse also have a W-2 job, raising withholding on a new Form W-4 can cover some or all of it instead.

## When are estimated taxes due for 2026?

**2026 estimated tax due dates (calendar-year filers)**

| Payment | Covers income earned | Due date |
| --- | --- | --- |
| 1st | January 1 – March 31, 2026 | April 15, 2026 |
| 2nd | April 1 – May 31, 2026 | June 15, 2026 |
| 3rd | June 1 – August 31, 2026 | September 15, 2026 |
| 4th | September 1 – December 31, 2026 | January 15, 2027 |

_Source: 2026 Form 1040-ES and Publication 505 (2026). You can skip the January 15, 2027 payment if you file your 2026 return by February 1, 2027 and pay the full balance with it._

Notice the periods aren't equal. The second payment covers only two months and the fourth covers four. That trips up a lot of owners, because the June payment lands right when spring work is starting to pay and the January payment lands after the holidays.

## How much should each quarterly payment be?

Most contractors size their payments using one of the IRS safe harbors. Pay at least the safe harbor amount, on time, in four equal parts, and you generally won't owe an underpayment penalty even if you owe more when you file.

**2026 safe harbors for avoiding the underpayment penalty**

| Your situation | Pay at least the smaller of |
| --- | --- |
| 2025 AGI of $150,000 or less | 90% of your 2026 tax, or 100% of your 2025 tax |
| 2025 AGI over $150,000 ($75,000 if married filing separately for 2026) | 90% of your 2026 tax, or 110% of your 2025 tax |
| At least two-thirds of gross income from farming or fishing | 66⅔% of your 2026 tax, or 100% of your 2025 tax |

_Source: 2026 Form 1040-ES, Special Rules. "Tax" means total tax, including self-employment tax, minus refundable credits._

**Prior-year safe harbor, per payment**

```
Quarterly payment = (2025 total tax × 100% or 110%) ÷ 4
```

Where:
- 2025 total tax = the total tax on your 2025 Form 1040, less refundable credits
- 100% or 110% = 110% if your 2025 AGI was over $150,000 ($75,000 married filing separately)

> **Example: an HVAC owner sizing 2026 payments**
>
> This is an illustrative example. Say Maria runs a two-truck HVAC company as a single-member LLC. Her 2025 return showed total tax of $18,000 and AGI of $96,000. Business is up, and she expects her 2026 tax to be about $24,000.
>
> Option A, current year: 90% × $24,000 = $21,600. Option B, prior year: 100% × $18,000 = $18,000 (her AGI was under $150,000, so 100% applies).
>
> The smaller is $18,000, so four payments of **$4,500** on April 15, June 15, September 15, 2026 and January 15, 2027 keep her out of penalty range. She will still owe about $6,000 when she files in April 2027, so she keeps setting money aside.

Use the [quarterly estimated tax calculator](https://www.brix.so/tools/quarterly-estimated-tax-calculator) to run your own numbers, and the [self-employment tax calculator](https://www.brix.so/tools/self-employment-tax-calculator) to see the SE tax piece by itself. If you'd rather think in percentages, see [how much to set aside for taxes](https://www.brix.so/learn/how-much-to-set-aside-for-taxes).

## What if your income is seasonal?

If most of your profit lands in a few months, the **annualized income installment method** can lower or remove a penalty for the early quarters. Instead of four equal payments, each payment is based on what you actually earned through the end of that period. You figure it on Schedule AI of Form 2210 when you file. It takes more bookkeeping, but it fits how a lot of trades really earn.

**How estimated taxes line up with the work, by trade**

| Trade | Typical cash pattern | What to watch |
| --- | --- | --- |
| Landscaping and lawn care | Spring and summer heavy, winter thin | The June 15 payment comes during peak season; the January payment comes when cash is lowest. Set aside weekly in season. |
| Roofing | Storm-driven spikes | One big storm month can change your whole-year tax. Recheck your estimate after any spike. |
| HVAC | Peaks in summer and winter | The September 15 payment follows the cooling season. Use summer cash for it. |
| Plumbing | Steadier, emergency driven | Equal quarterly payments usually fit. Watch for large one-off jobs like repipes. |
| Electrical | Project and permit driven | Large commercial or panel-upgrade jobs can land in one quarter. Annualizing can help. |
| Cleaning and pest control | Recurring route revenue | Steady income suits the prior-year safe harbor and four equal payments. |

_Patterns are typical examples, not measured data. Use your own monthly profit from your books._

## How do you pay estimated taxes?

You can pay online through IRS Direct Pay from a bank account, through your IRS Online Account, through EFTPS, by debit or credit card through an IRS-approved processor (they charge a fee), or by mailing a check with a Form 1040-ES voucher. Online payments give you a confirmation number, which is worth saving with your books. Pay state estimates separately through your state's tax agency.

## What is the penalty for underpaying estimated tax?

If you pay too little or too late, the IRS charges a penalty that works like interest. It is figured on the amount you underpaid, for the number of days it was late, at the IRS's published quarterly underpayment interest rate. You use Form 2210 to see whether you owe it. The penalty is figured period by period, so per Publication 505 you can owe it for a short quarter even if you end up due a refund when you file.

The IRS can waive the penalty if a casualty, disaster or other unusual circumstance kept you from paying, or if you retired after age 62 or became disabled in the tax year or the year before and the underpayment was due to reasonable cause.

## Common mistakes contractors make with estimated taxes

- **Forgetting self-employment tax.** Owners estimate income tax and forget the 15.3% SE tax, which is often the bigger number at lower profit levels.
- **Using revenue instead of profit.** Tax is figured on profit after expenses. If you don't track [deductions](https://www.brix.so/learn/contractor-tax-deductions-list) and [mileage](https://www.brix.so/learn/mileage-deduction-for-contractors) during the year, your estimate will be too high or your return will be too thin on proof.
- **Missing the 110% rule.** Once your AGI tops $150,000, the prior-year safe harbor is 110%, not 100%.
- **Spending the tax money.** Payments are easy when the money is already parked in a separate account. They're painful when it has to come out of next week's payroll.
- **Ignoring big equipment purchases.** A truck or machine you expense under [Section 179](https://www.brix.so/learn/section-179-deduction) or [bonus depreciation](https://www.brix.so/learn/bonus-depreciation) can cut your tax a lot. Tell your CPA before the September or January payment, not after.
- **Skipping the state.** Most income-tax states expect quarterly payments too, on their own schedule.

BRIX keeps your expenses categorized as jobs are invoiced and paid, syncs everything to QuickBooks, and reminds you before each quarterly estimated tax date, so the numbers you hand your CPA are current. BRIX doesn't file taxes or give tax advice; your tax professional decides the payment amount.

- [Bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes): Keeps expenses categorized, tracks 1099 subcontractors and sales tax, and reminds you of quarterly estimated tax dates. BRIX does not file taxes or give tax advice.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.
- [Invoicing and payments](https://www.brix.so/features/invoicing-payments): Turns finished jobs into invoices and politely chases unpaid ones until the money is in your account.

For the full picture, including entity choice and year-end planning, read the [contractor taxes guide](https://www.brix.so/guides/contractor-taxes) or see how [BRIX bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes) works.

## Frequently asked questions

### Who must pay estimated tax?

For 2026, you generally must pay estimated tax if you expect to owe at least $1,000 after withholding and refundable credits, and your withholding and credits will be less than the smaller of 90% of your 2026 tax or 100% of your 2025 tax. Most self-employed contractors with a profitable year meet that test.

### Who does not have to pay estimated tax?

You don't have to pay estimated tax for 2026 if you were a U.S. citizen or resident for all of 2025 and had no tax liability for 2025. You also don't need to if withholding from a W-2 job, yours or your spouse's on a joint return, covers the safe harbor amount.

### When are estimated taxes due?

For tax year 2026 the due dates are April 15, 2026, June 15, 2026, September 15, 2026 and January 15, 2027. You can skip the January payment if you file your 2026 return by February 1, 2027 and pay everything you owe with it.

### How do I figure estimated tax?

Estimate your 2026 profit, figure self-employment tax on 92.35% of it, then figure income tax after deductions, using the worksheet in the 2026 Form 1040-ES. Or use the prior-year safe harbor: divide your 2025 total tax (110% of it if your 2025 AGI was over $150,000) by four.

### What is the penalty for underpayment of estimated tax?

It works like interest on the amount you underpaid, for each day it was late, at the IRS's quarterly underpayment rate. You check whether you owe it on Form 2210. Paying the safe harbor amount on time each quarter generally avoids it.

### How do I pay estimated taxes?

Use IRS Direct Pay, your IRS Online Account or EFTPS to pay from a bank account, pay by card through an approved processor for a fee, or mail a check with a Form 1040-ES voucher. Keep the confirmation number with your books.

### Do I need to pay estimated taxes in my first year in business?

If you had no tax liability at all for the prior full year, you are exempt from estimated tax for the current year. Otherwise the normal rules apply. Even when you are exempt, setting money aside each week avoids a painful bill in April.

## Related

- [How Much Should You Set Aside for Taxes When You're Self-Employed?](https://www.brix.so/learn/how-much-to-set-aside-for-taxes)
- [What Is Self-Employment Tax?](https://www.brix.so/learn/self-employment-tax)
- [Contractor Tax Deductions: The Complete List for 2026](https://www.brix.so/learn/contractor-tax-deductions-list)
- [What Is the Section 179 Deduction?](https://www.brix.so/learn/section-179-deduction)
- [What Is the QBI Deduction?](https://www.brix.so/learn/qbi-deduction)
- [Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)](https://www.brix.so/tools/quarterly-estimated-tax-calculator)
- [Self-Employment Tax Calculator (2026)](https://www.brix.so/tools/self-employment-tax-calculator)
- [Taxes for Contractors: The 2026 Guide for Self-Employed Trades Owners](https://www.brix.so/guides/contractor-taxes)
- [Bookkeeping for contractors that keeps your books tax-ready all year](https://www.brix.so/features/bookkeeping-taxes)
- [Mileage Deduction Calculator for Contractors (2026)](https://www.brix.so/tools/mileage-deduction-calculator)

## Sources

- [IRS: 2026 Form 1040-ES, Estimated Tax for Individuals](https://www.irs.gov/pub/irs-pdf/f1040es.pdf) (checked 2026-10-12)
- [IRS: Publication 505 (2026), Tax Withholding and Estimated Tax](https://www.irs.gov/pub/irs-pdf/p505.pdf) (checked 2026-10-12)
- [IRS: Topic No. 306, Penalty for Underpayment of Estimated Tax](https://www.irs.gov/taxtopics/tc306) (checked 2026-10-12)
- [IRS: Underpayment of Estimated Tax by Individuals Penalty](https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty) (checked 2026-10-12)
- [IRS: Topic No. 554, Self-Employment Tax](https://www.irs.gov/taxtopics/tc554) (checked 2026-10-12)

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Written by BRIX Editorial Team. Last updated 2026-10-12. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors