What a quarterly payment actually is
When you work a regular job, tax comes out of every paycheck before you see the money, and your employer sends it in for you. Self-employed people don't get that. The client pays you the full amount, and the tax on it is still owed.
So the IRS asks you to pay as you go. Four times a year you send in part of what you expect to owe. The form is Form 1040-ES, which includes a worksheet for the estimate, though you can pay online instead of mailing a voucher.
Each payment covers two things. One is income tax. The other is self-employment tax, the Social Security and Medicare piece an employer would normally split with you. The IRS sets it at 15.3 percent of net self-employment earnings, and the Social Security part stops once earnings pass an annual limit.
The IRS says you generally need to make these payments if you expect to owe at least one thousand dollars when you file, after withholding and credits. Below that, most people can settle up in April and be fine.
The four federal due dates
For 2026 the payments are due April 15, June 15, September 15, and January 15, 2027. The IRS divides the year into four payment periods, each with its own due date, and they are not evenly spaced. The June payment comes only two months after April, and the January one lands two weeks after the holidays when cash is thin. That last one is the one people forget, and it's the one that hurts.
If a due date falls on a weekend or a legal holiday, the IRS moves it to the next business day. The IRS can charge an underpayment penalty for each period you come up short, even if you're due a refund when you file, so an imperfect payment sent on time beats a perfect one sent late. The IRS also lets you pay more often than quarterly, weekly or monthly if that suits your cash flow, as long as enough is in by the end of each period.
How much to send, and what safe harbor means
You don't have to guess the year perfectly. The rules give you a floor to stand on, and that floor is what people mean by safe harbor.
Pay at least ninety percent of what you actually end up owing this year, on time across the four due dates, and you generally avoid the underpayment penalty. Pay at least one hundred percent of the total tax on last year's return on the same timetable and you are also covered, even if this year turns out to be your best one yet. The penalty is worked out period by period, so a lump sum in January doesn't fix a missed June. If your adjusted gross income last year was above one hundred fifty thousand dollars, or seventy-five thousand if you're married filing separately, that second number rises to one hundred ten percent. All three rules are in the Form 1040-ES instructions.
One habit that makes this manageable: move a fixed share of each payment you receive into a separate savings account the day it lands. The right share depends on your bracket and your state, and the worksheet tells you, but the habit matters more than the exact percentage.
Not sure what your books say this quarter?
Call and we'll talk through where you are. The first conversation is free.
New Hampshire, Vermont, and Massachusetts are not the same
New Hampshire has no income tax on wages and no general sales tax, and the old tax on interest and dividends was repealed for periods beginning in 2025. A sole proprietor in Manchester or Concord has no state income tax return to file on wages. New Hampshire does tax business profits above a filing threshold based on gross business income, though, so check where you stand instead of assuming you're clear.
Vermont and Massachusetts both tax income. Vermont says a self-employed person must pay estimated income tax to the state, usually quarterly on the same four dates, using Form IN-114. Massachusetts requires estimated payments when you expect to owe more than four hundred dollars on income with no withholding, and it wants at least eighty percent of the year's tax paid in before you file.
Nashua sits on the Massachusetts line, so crossing a border for work is ordinary in these three states, and crossing one changes the answer. A contractor who lives in Nashua but works most of the year on jobs in Massachusetts has Massachusetts source income, because Massachusetts taxes nonresidents on a trade or business carried on inside the state, and its estimated payment rule applies to nonresidents too. Living in New Hampshire doesn't switch that off. It only means there's no New Hampshire wage income tax at home to offset it against.
A shop on the Vermont side of the Connecticut River with customers across the bridge in New Hampshire has a different question, and it is about sales tax, not income tax. Vermont charges six percent sales tax on retail sales of goods unless an exemption applies, and New Hampshire charges none, so the shop needs to know which of its sales Vermont counts. That is a separate filing from the income tax estimates.
Why current books turn the estimate into math
An estimate is only as good as the profit number behind it. If the books are three months behind, you're guessing, and a guess lands high or low. High means you handed the IRS money that could have covered a truck payment. Low means a bill in April you didn't plan for.
That is the whole argument for closing the books every month. When March ends and the numbers are already reconciled, the quarterly worksheet is arithmetic, not a hunch.
Current books also catch the deductions that go missing later. Mileage, supplies, software, the home office share of the heating bill in February if the space qualifies for the deduction. Nobody rebuilds that in April with any accuracy, and every missed deduction pushes the estimate higher than it needs to be.
If you are behind, getting the books caught up comes first. Working an estimate off messy records just moves the problem to next quarter. A monthly profit and loss report is the most useful page here, because it is the number you start the estimate from.
Three habits that make this easier
Open a separate account for tax money and treat it as spent. The January 15 payment is the one that gets squeezed by a strong November and a new piece of equipment.
Pay online the same day you look at the number, then save the confirmation. Mailed checks get lost, and a postmark argument isn't one you want to have.
Keep the books and the return in one place. We offer both monthly bookkeeping and tax preparation, so the books that feed each quarter's worksheet can be the same books that feed the return.
One place for the books and the return
Call (603) 805-2308 and we'll start with where the books stand. No obligation on the first call.
Where to start
If you have never sent an estimated payment, or you have been sending the same amount for years without checking it, one conversation usually settles what to look at first. Call (603) 805-2308, book a free consultation, or send us a note and we'll talk through where your books stand.
This is general information for small businesses in New Hampshire, Vermont, and Massachusetts, not advice for your specific situation. Tax rules change, so check the IRS and your state's tax department before you send anything, and your own numbers deserve a real look first.
