Quarterly Estimated Tax
Quick definition
Four federal tax payments per year that self-employed workers make in lieu of W-2 paycheck withholding.
If you expect to owe more than $1,000 in federal tax for the year, the IRS expects you to pay quarterly. This applies to most self-employed workers who do not have a W-2 job withholding tax for them.
The four deadlines
- Q1: April 15 (covers Jan–Mar income)
- Q2: June 15 (covers Apr–May income)
- Q3: September 15 (covers Jun–Aug income)
- Q4: January 15 of the next year (covers Sep–Dec income)
How mileage factors in
When estimating quarterly payments, deduct your year-to-date business miles at the standard rate from your year-to-date income before calculating tax. A driver who has logged 8,000 miles by June 15 has a $5,800 deduction to apply to Q2 estimates. See the filing guide for the full math.
Penalty for missing payments
The IRS charges underpayment penalties (typically 6-8% annualized on the shortfall) if your quarterly payments come up short. Tracking miles in real time avoids over-paying estimates and keeps cash in your account.
Related terms
Schedule C
The federal form self-employed workers use to report business income and expenses, including the mileage deduction.
Self-Employment Tax
The 15.3% tax on net self-employment income that funds Social Security and Medicare.
Standard Mileage Rate
The IRS-published per-mile deduction amount. 72.5 cents per business mile for 2026.
Track every business mile.
40 auto trips a month, free forever. Switch from any tracker with a one-tap CSV import.
Download free on the App Store