Nobody withholds tax from a contractor’s profit. The IRS still expects it paid four times a year. Miss the schedule and a penalty runs, even if you pay in full in April.
Greg Neilsen, JD, LLM (Master of Laws in Taxation), reviews our guides. Last reviewed: October 5, 2026.
Each answer is below.
Most owners of a profitable trade business. You generally must pay 2026 estimates if you expect to owe at least $1,000 after withholding and credits. The exception is when your withholding already covers the safe harbor, explained below.
Florida has no personal income tax. Your estimates are federal only.
Example: A pest control company runs as an S corporation. It pays the owner a $70,000 salary with tax withheld. After that salary, the company earns $90,000 of profit. The owner owes income tax on the $90,000 even if the cash stays in the company account. Nothing is withheld on it, so it needs estimates or extra withholding.
| Payment | Covers income earned | Due date |
|---|---|---|
| 1st | January 1 to March 31 | April 15, 2026 |
| 2nd | April 1 to May 31 | June 15, 2026 |
| 3rd | June 1 to August 31 | September 15, 2026 |
| 4th | September 1 to December 31 | January 15, 2027 |
All four dates fall on business days in this cycle. When a due date lands on a weekend or legal holiday, the payment moves to the next business day.
The first three dates have passed. The last 2026 payment is due January 15, 2027. You can skip it if you file your 2026 return by February 1, 2027 and pay the full balance with it.
Example: A pressure-washing owner files his 2026 return on January 28, 2027. He pays the full balance that day. He owes no penalty for skipping the January 15 payment.
Add two taxes: self-employment tax and income tax. Then spread the total over the four dates, or use the annualized method below.
Self-employment tax is Social Security and Medicare for the self-employed. It applies to 92.35 percent of your net profit, at 15.3 percent. The 12.4 percent Social Security part stops at the 2026 wage base of $184,500. The 2.9 percent Medicare part has no cap.
Wages from a job count against the same $184,500. Income tax comes on top, at your bracket. Half the self-employment tax comes off your income before that tax is figured.
Example: An electrician running a sole proprietorship expects $100,000 of profit. 92.35 percent of that is $92,350. Self-employment tax at 15.3 percent is $14,130. Income tax is added on top. The worksheet in Form 1040-ES walks through the rest.
Example: A plumbing owner expects $250,000 of profit. 92.35 percent is $230,875. Social Security tax stops at the wage base: 12.4 percent of $184,500 is $22,878. Medicare has no cap: 2.9 percent of $230,875 is $6,695. Self-employment tax totals $29,573, before income tax.
Pay the required amount on time and the IRS charges no penalty, even if you owe more in April. The required amount for the year is the smaller of two numbers:
Most owners aim at the prior-year number. You know it today. The current-year number moves with every job.
Two more exceptions apply. No penalty if your tax after withholding comes in under $1,000. No penalty if you owed no tax for 2025, as long as 2025 was a full 12-month year and you were a U.S. citizen or resident all year.
Example: A roofer’s 2025 tax was $48,000. His 2025 adjusted gross income was $210,000. His safe number for 2026 is 110 percent, or $52,800. That is $13,200 a quarter. If his 2026 tax ends at $70,000, he owes $17,200 in April with no penalty.
Use the annualized income installment method. It ties each payment to what you actually earned by that point in the year. A business that makes its money in summer can pay less in spring and catch up later.
You claim it on Form 2210, Schedule AI. Each period’s profit is multiplied up to a full-year figure: by 4 for January through March, 2.4 through May, and 1.5 through August. You figure the tax on that full-year figure. By the four dates, you owe 22.5, 45, 67.5, and 90 percent of it.
Trades fit this method well. Florida HVAC peaks in summer. Pool, landscaping, and roofing work swing with the seasons too. See how we work with HVAC companies.
Example: Illustration only. For simple math, assume total federal tax runs 25 percent of profit. An HVAC owner expects $160,000 of profit for 2026, so $40,000 of tax. The 90 percent target is $36,000, or $9,000 a quarter on the even schedule.
The owner kept $6,750 in the business through the slow spring and $9,900 through June.
Federal income tax withheld from your paycheck counts as paid evenly across the four due dates. That holds even when the withholding happens in December. An estimate counts only on the date you pay it.
That makes December payroll a repair tool. An owner who fell behind can add withholding to the last paychecks of the year. The shortfall disappears for all four quarters.
Example: An S corporation owner’s 2025 tax was $42,000. Her 2025 adjusted gross income was over $150,000, so her safe number is 110 percent, or $46,200. Through November, her salary withholding totals $20,000. She paid no estimates. Her December paycheck adds $26,200 of federal withholding. The total of $46,200 counts as $11,550 paid on each due date, and the penalty never starts.
The December paycheck has to be big enough to carry that withholding. That often pairs with a year-end salary review.
Choose estimated tax, Form 1040-ES, as the payment reason. Pick the right tax year. Save every confirmation number.
Example: A pool service owner pays $6,000 through IRS Direct Pay on January 12, 2027. She selects estimated tax and tax year 2026. The payment counts toward the January 15 installment.
It works like interest. The IRS charges its underpayment rate, the federal short-term rate plus 3 percentage points, set each quarter. It runs on each short installment from its due date until you pay or until April 15, 2027, whichever comes first.
The penalty is figured quarter by quarter. A big April check does not fix a short June.
Form 2210 figures it. Most people let the IRS figure it and send a bill. You file Form 2210 yourself to use the annualized method or to ask for a waiver.
Example: A painting contractor’s September 15 installment was $4,000. She pays it on October 15. The penalty runs on $4,000 for 30 days. Her other quarters are not affected.
If you owed no federal tax last year, you owe no estimated tax penalty this year. That rule requires a full 12-month prior year as a U.S. citizen or resident. The tax itself is still due in April.
Example: A new landscaper worked part-time in 2025. Her 2025 return showed zero tax. In 2026 her own business earns $45,000 of profit. She owes no estimated tax penalty for 2026. Self-employment tax alone is $6,358: 92.35 percent of $45,000 is $41,558, and 15.3 percent of that is $6,358. Income tax comes on top, all due April 15, 2027.
The exception ends after one year. Her 2026 tax becomes the safe number for her 2027 estimates. Landscapers can see how we set up their books on our landscaping accounting page.
Estimates are one line on a longer list. Our year-end tax planning checklist covers the other moves before December 31.
We set each quarter’s number from your actual books. We check it again before each due date. If the year turns, the number turns with it.
On our Planned plan, the written tax plan is included. One flat monthly fee covers bookkeeping, tax preparation, and planning on most plans. Plans start at $750 per month. See our tax planning service.
April 15, June 15, and September 15, 2026, and January 15, 2027. You can skip the January payment if you file your 2026 return by February 1, 2027 and pay the full balance.
The smaller of 90 percent of your 2026 tax or 100 percent of your 2025 tax. Use 110 percent of 2025 tax if your 2025 adjusted gross income was over $150,000.
Often, yes. The K-1 profit has no withholding. Many owners cover it with extra withholding on their salary instead, which counts as paid evenly through the year.
Yes, with the annualized income installment method on Form 2210, Schedule AI. Each payment follows the profit earned by that point in the year.
Not on personal income. Florida has no personal income tax. Your estimated payments go to the IRS only.
This guide is educational and is not tax advice for your situation. Tax rules change, and the right move depends on your numbers. Talk to a tax professional before you act.
Greg Neilsen, JD, LLM (Master of Laws in Taxation), reviews our guides. Last reviewed: October 5, 2026.
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