When Should I Pay Estimated Taxes?

Every September, more than one business owner sits across from me with the same concern. They worked all year, did well, but no one withheld taxes from what they earned. Recently, they heard that an important deadline is right around the corner. The question they ask me is simple: “When do I need to pay estimated taxes, and how much?”

If you are self-employed or own your own business, this is one of the most important questions of the year. Let’s answer it calmly.

Why This Matters to You

When someone has a job with an employer, the company withholds taxes from each paycheck and sends them to the government on their behalf. When you are your own boss, no one does that. The money goes directly into your account, and it is easy to feel like it is all profit. The problem appears in April, when you file your return and discover that you owe a large amount all at once—sometimes with a penalty on top.

The U.S. tax system works on a pay-as-you-go basis: you are expected to pay as you earn, not all at the end. That is why estimated taxes exist.

What Are Estimated Taxes?

Estimated taxes are payments you make throughout the year—generally four times a year—when no one is automatically withholding taxes for you. They cover both income tax and Self-Employment Tax, which is the Social Security and Medicare portion that an employee normally shares with their employer. In short: you estimate what you expect to owe for the year and pay it in installments instead of leaving everything until April.

When Are They Due?

For most business owners, there are four payment dates each year:

•April 15

•June 15

•September 15

•January 15 of the following year

The next deadline is very close: September 15, 2026. If you had strong income this summer and have not set anything aside for taxes yet, now is the time to review it.

And here is something many people forget: in North Carolina, you may also need to pay estimated state taxes using Form NC-40 on those same dates. It is not just the IRS—the state expects its share as well.

A Simple Example

Imagine a contractor who earns about $6,000 per month and does not have anyone withholding taxes. Instead of spending everything and becoming stressed in April, they set aside part of each payment in a separate account and, every three months, send that money to the IRS and the state.

When tax season arrives, they have already paid most of what they owe—without surprises or penalties.

How Much Do I Need to Pay?

This is where it is important to be careful, because every business is different. But there is a general rule that can help you rest easier: if, during the year, you pay at least the same amount in taxes that you paid last year, you are generally protected from an underpayment penalty, even if you end up owing a little more at the end. (If you had high income last year, that percentage increases somewhat, and that is when it is worth sitting down with your accountant.)

Generally, you are expected to pay estimated taxes if you believe you will owe $1,000 or more when you file your return. The same idea applies in North Carolina.

The Most Common Mistakes

These are the mistakes I see most often:

•Spending all of your income without setting anything aside, then not having cash available when the payment deadline arrives.

•Paying only the IRS and completely forgetting about the state.

•Estimating the payment without reviewing the actual numbers for the business.

•Not adjusting payments when the business has had a much better—or much worse—year than the previous one.

My Recommendation

What I usually explain to my clients is that the best way to manage this is simple. Open a separate savings account just for taxes, and every time money comes into the business, immediately set aside a percentage. That way, when each payment deadline arrives, the money is already separated and you do not have to take it from where it should not come from.

Once a quarter, review your actual numbers with your accountant to adjust the amount. This takes away the stress of April and gives you control over your cash flow throughout the year.

Do You Have Questions About Your Business?

At Lifaver Trujillo, CPA, PLLC, we help small businesses in North Carolina with:

•Accounting

•Payroll

•Taxes

•Tax Planning

•QuickBooks

•Financial Advisory Services

If you would like a consultation, we would be happy to help.

Lifaver Trujillo, CPA, PLLC

📞 (919) 590-3610

📍 4804 Page Creek Lane, Suite 114, Durham, NC 27703

www.ltrujillocpa.com

☕ Trujillo’s Tip of the Week

Before September 15 arrives, take ten minutes to review how much your business earned between June and August, and immediately set aside the tax portion in a separate account. That small habit, practiced four times a year, is what turns tax season into a manageable process instead of an unpleasant surprise.

This content is for educational purposes only and does not constitute tax, legal, or financial advice. Every business is different. Consult with your accountant before making decisions.