Definition
Tax payments freelancers and other untaxed earners send the IRS four times a year, since no employer withholds for them. Generally required if you will owe more than $1,000 at filing.
Why it matters
Self-employment income arrives gross and the tax bill arrives later: quarterly payments are how you avoid a brutal April and underpayment penalties. The discipline is setting the money aside the day you are paid.
Example
A freelancer earning $8,000 in a month moves 25-30% ($2,000-2,400) into a tax sub-account immediately, then pays the IRS each quarter (deadlines in April, June, September, and January) from that account.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.