What is Estimated Taxes?
Definition Estimated taxes are quarterly payments made directly to the IRS on income that is not subject to withholding, such as self-employment earnings, investment income, and business profits. Because the U.S. tax system is pay-as-you-go, taxpayers who do not prepay enough can owe underpayment penalties even if they pay in full at filing. Payments are generally due four times a year.
Helping self-employed and investor clients calculate and make timely estimates avoids penalties and prevents a large, stressful balance at tax time.