How to calculate quarterly estimated taxes

Step 1: estimate your 2027 net profit

Net profit is what your business takes in minus business expenses: the number that will end up on Schedule C. Use last year as a base and adjust for clients you gained or lost. If you are in your first year, use what you have earned so far and project it to December, then round down a little if your income is uneven.

Step 2: self-employment tax

Self-employment tax is Social Security and Medicare for people who work for themselves: 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of net profit. It applies once net earnings reach $400. The Social Security part stops at the year's wage base, which counts W-2 wages first; Medicare has no cap, and an extra 0.9% Medicare tax applies to high earners.

Example with made-up numbers
Net profit: 20,000
20,000 × 92.35% = 18,470
18,470 × 15.3% = 2,825.91 of self-employment tax

Half of the self-employment tax is deducted when you work out your adjusted gross income, which lowers your income tax a little.

Step 3: income tax

Add your other income (W-2 wages, interest) to the profit, subtract half the self-employment tax, then the standard deduction (or your itemized deductions) and, if you qualify, the qualified business income deduction. Apply the 2027 tax brackets for your filing status. The IRS published the 2027 brackets and standard deduction in a revenue procedure in the fall of 2026; use those figures, not last year's.

Step 4: subtract withholding

If you also have a W-2 job, your employer withholds income tax from every paycheck. Subtract the withholding you expect for the year. What is left is the amount your estimated payments need to cover.

Step 5: divide by four, then check the safe harbor

Dividing what you owe by four gives a payment that leaves you close to $0 due in April. The safe harbor may let you pay less without penalty: it is based on 90% of this year's tax or 100% of last year's (110% if last year's AGI was over $150,000). Pay the lower of the two if cash is tight, knowing you will owe the rest when you file. Details in the safe harbor rule.

A shortcut for side income

If you have a day job, you can ask your employer to withhold more by updating your Form W-4. Withholding counts as paid evenly through the year, even if you raise it in October, so it can cover a shortfall in earlier quarters. For many people with modest side income, this replaces some or all quarterly payments.

Recalculate during the year

Your first estimate will be off. Update it before each due date with your actual profit so far. If income is up, raise the next payments; if it is down, lower them. Keeping a running total of income and expenses by month makes this a ten-minute job.

How much to set aside from each payment

Many freelancers move a fixed share of every payment they receive into a tax savings account. The right share depends on your bracket and state; run the numbers once with your own figures and use that share for the year, then adjust.

The free quarterly estimated tax calculator does steps 2 to 5 with the 2027 figures and shows both the safe harbor and the owe-about-$0 amount. The four deadlines are in estimated tax due dates 2027.

General information, not financial, tax or legal advice. Examples use made-up numbers.