When I went freelance, nobody withheld anything from my pay, and my first April was painful. Now I run a ten-minute routine each quarter.
1. Total net profit so far. Income minus business expenses for the year to date. Be honest about expenses you can document.
2. Work out self-employment tax. It's roughly 15.3% on 92.35% of net profit, covering Social Security and Medicare. The self-employment tax calculator for 2026 does the math, including the Social Security wage cap.
3. Estimate income tax and split it. The quarterly estimated tax calculator turns your annual estimate into payment amounts and shows the 2026 due dates (the next one is January 15).
4. Set aside cash every invoice. I move about 25-30% of each payment into a separate account, so the quarterly payment is never a surprise.
5. Track mileage as you go. If you drive for work, log trips weekly; the mileage reimbursement calculator uses the 2026 rate.
This isn't tax advice, just a simple system. A CPA can confirm your numbers, but showing up with them already organized saves you time and fees.
Top comments (1)
Good routine. Two things I'd add, because they change the math for a lot of people:
Safe harbor. You don't have to nail this year's number to avoid the underpayment penalty. If you pay in at least 100% of last year's total tax (110% if last year's AGI was over $150k), split across the four dates, you're covered even if this year turns out much bigger. For a first-year freelancer with uneven income, that's often easier than re-estimating every quarter. You also owe no penalty if your balance due ends up under $1,000.
Lumpy income. The IRS assumes you earned evenly through the year, so a big Q4 can make it look like you underpaid in Q1 to Q3. The annualized income installment method (Schedule AI on Form 2210) lets you match payments to when the money actually came in.
One small one for step 3: half of your self-employment tax is deductible, so income tax is figured on profit minus that half, which trims the estimate a bit.
I wrote up the safe harbor rules with worked examples here if it helps anyone: keelsheet.com/guides/estimated-tax...