Freelancers, you probably know you have to pay estimated taxes every quarter (if not, here’s a primer). But what happens if your estimates are a little off? Forbes explains the specific requirements and rules for paying these taxes.


There are online calculators to help you estimate your taxes, but to avoid any penalties, Forbes explains how accurate your estimates should be:

This is where something called the Safe-Harbor law comes into play. Put simply, you must either shoot for 90% of your tax for the current year (even though you likely don’t know this number in advance) or 100% of the tax shown on your prior year’s tax return to avoid an estimated tax penalty. If you earned more than $150,000 for the year, then the requirement increases to 110%.


To play it safe, you probably want to go with 100% of the prior year’s return, especially if your income is really variable. When you start filing taxes as a freelancer, the IRS makes this convenient and typically sends 1040-ES payment vouchers to make it easy (you can also pay online via Direct Pay). For more detail, head to the full post at Forbes below.

Estimated Taxes Made Easy | Forbes