Running a professional services business already requires you to stay on top of many moving pieces. You are managing clients, delivering work, overseeing your team, and planning what comes next. In the middle of all that, taxes often feel like something you deal with later. Unfortunately, estimated taxes are one of those areas where waiting too long can create stress, cash flow issues, and unnecessary penalties.
If you are self employed or earn income that is not fully covered by withholding, learning estimated taxes in 2026 is part of your responsibility as a business owner. With 2026 approaching, now is a good time to understand how estimated taxes work, who needs to pay them, and how to plan for them in a way that supports your business rather than disrupts it.
What Estimated Taxes Are And Why They Exist
The IRS operates on a pay-as-you-go system. That means taxes are expected to be paid throughout the year as income is earned, not all at once when you file your return. For employees, this usually happens automatically through paycheck withholding. For many business owners and professionals, it does not.
Estimated taxes are quarterly payments you make toward your expected annual tax bill. These payments typically cover federal income tax and, if you are self employed, self-employment tax as well.
If you earn income without enough tax withheld and do not make estimated payments, the IRS may assess penalties and interest even if you eventually pay the full amount owed when you file your return.
Who Needs To Pay Estimated Taxes In 2026
You generally need to make estimated tax payments if both of the following are true:
- You expect to owe at least $1,000 in federal tax for the year after subtracting withholding and credits.
- Your withholding and credits will not cover your full tax liability.
This applies to many types of professional service business owners and it can also apply if you have investment income, rental income, or income from multiple sources, where withholding does not fully account for your tax bill.
How To Estimate Your 2026 Tax Payments
Estimating taxes does not have to be perfect, the goal is to pay close enough throughout the year to avoid penalties and protect your cash flow.
Start by estimating your total income for 2026. This includes business income and any other taxable income you expect to receive. From there, subtract expected deductions and credits to arrive at your estimated taxable income.
Next, calculate your estimated total tax based on current tax brackets and applicable self employment taxes. Then subtract any expected withholding from other income sources, if applicable.
The remaining amount is what you will typically divide into four estimated tax payments.
The IRS provides Form 1040 ES, which includes a worksheet to help guide this process:
Many business owners also rely on their accountant to refine these estimates as the year unfolds, especially if income fluctuates.
Estimated Tax Payment Deadlines For 2026 And What They Cover
Estimated tax payments are due quarterly, but the quarters are not equal and do not align neatly with calendar quarters. Each payment applies to income earned during a specific period.
For the 2026 tax year, the federal estimated tax deadlines and covered income periods are:
- April 15, 2026: Covers income earned from January 1 through March 31, 2026
- June 15, 2026: Covers income earned from April 1 through May 31, 2026
- September 15, 2026: Covers income earned from June 1 through August 31, 2026
- January 15, 2027: Covers income earned from September 1 through December 31, 2026
If a due date falls on a weekend or federal holiday, the deadline generally shifts to the next business day. Missing one quarterly payment can trigger penalties even if later payments are made on time, so consistency matters.
How To Make Estimated Tax Payments
The IRS offers several ways to make estimated tax payments, and most business owners prefer electronic options for speed, accuracy, and record-keeping.
Common payment methods include:
You can also pay by check using the vouchers included with Form 1040 ES, though electronic payments provide faster confirmation and easier tracking.
Understanding and Avoiding Penalties
Estimated tax penalties are generally based on how much you underpaid and how long the underpayment lasted. The IRS focuses on whether you paid enough throughout the year rather than whether each payment was exact.
You may avoid penalties if you meet one of the IRS safe harbor rules:
- You pay at least 90% of your current year tax liability.
- Or you pay 100% of your prior year tax liability, or 110% for higher income taxpayers
If your income changes significantly during the year, your estimated payments can be adjusted. This is especially important for professional services firms with uneven billing cycles, project-based revenue, or seasonal income.
Wisconsin Estimated Taxes
If you’re a business owner operating in Wisconsin, you’re required to make state estimated tax payments in addition to federal estimated taxes. These payments are handled separately through the Wisconsin Department of Revenue and follow their own rules and forms.
If you expect to owe $500 or more in Wisconsin income tax after withholding and credits, you are generally required to make estimated payments to the state. This commonly applies to professional services business owners who operate as sole proprietors, partners, or pass-through entities such as S corporations and LLCs.
Wisconsin’s estimated tax deadlines generally follow the same quarterly schedule as the IRS, with payments tied to when income is earned.
Working with a CPA who understands both federal and Wisconsin tax rules can help ensure payments stay aligned, penalties are avoided, and cash flow remains predictable.
Bringing It All Together
Estimated taxes are not just a compliance task. They are a cash flow and planning issue that directly affects how stable and confident you feel running your business.
By understanding who needs to pay, how payments are calculated, and which income periods each deadline applies to, you can reduce stress and avoid surprises when tax season arrives.
At Affinity Accounting, we help professional services business owners plan for estimated taxes in a way that fits their cash flow and growth goals. We project tax liability, monitor changes throughout the year, and adjust strategies as your business evolves.
If you would like help planning your estimated taxes for 2026 or want a clearer view of how taxes fit into your broader financial picture, we would be happy to talk.
Reach out to schedule a conversation with our team and move forward with greater clarity and confidence.
