Why Small Businesses Should Pay Attention to Quarterly Tax Payments

As a small business owner, you have numerous obligations – managing employees, maintaining customer relations, and calculating and submitting quarterly taxes. Quarterly estimated tax responsibilities may seem intimidating at first, but once you get the hang of it, these submissions will help support your business's long-term tax planning initiatives. This helps ensure compliance and peace of mind as you focus on your day-to-day operations.

Use this blog to gain a better understanding of quarterly estimated taxes, when they're due for the 2026 tax year, and the benefits of keeping on top of your finances. Common misconceptions about quarterly estimated taxes are also addressed and dispelled, thereby improving the efficiency of your process.   

What are quarterly taxes for a business?

Income tax is "pay as you go," meaning the IRS expects businesses to make regular payments throughout the year on revenue. Business owners and self-employed, non-W-2 workers must calculate and submit quarterly estimated taxes to the IRS four times a year. Quarterly estimated tax due dates for 2026 are as follows: 

• April 15

• June 15

• September 15

• January 15, 2027

Failure to submit on time or to accurately calculate what is owed can result in fines and increased scrutiny from the IRS. IRS fines aren't fixed and will accumulate until action is taken, so it's in your best interest to submit as soon as possible, even if it's past the deadline.

The Importance of Quarterly Tax Payments for Small Businesses

Accurately calculating quarterly estimated tax payments will enhance numerous aspects of your small business.  

Cash flow management 

Cash flow management tracks the revenue coming in and out of your business and lets you forecast the amount of money you'll need to cover expenses. This is helpful for your quarterly tax estimates. The further out you can estimate, the better – you can even produce a rough estimate for the year. It will allow you to set that money aside in advance, so you won't have to scramble when taxes are due.  

Legal obligations

Quarterly estimated tax payments are non-negotiable. Missing a deadline or submitting an underpayment will typically result in fees and penalties that will continue to accrue interest until the issue is addressed. Accurate, timely payments allow you to fulfill your legal obligations, provide insight into your finances, and avoid penalties.

Predictability and budgeting

Accurate quarterly estimated tax payments impact your overall budget and help you predict your budgetary needs throughout the fiscal year. You can plan for other business expenses when you know how much you'll owe the IRS each quarter. 

Real-time financial health picture 

These activities help provide a more accurate, real-time picture of your business's financial health. The more precise your estimated payments are, the better you can understand your business's cash flow and other essential financial aspects of your operations.  

Common Misconceptions About Quarterly Tax Payments

Common questions due to quarterly estimate misconceptions include: 

• Are quarterly tax payments required?

• Do small businesses have to file quarterly taxes?

However, the most common misconceptions about quarterly estimated tax payments are that: 

• Only large businesses are required to pay quarterly taxes.

• Quarterly tax payments are optional.

• Making a lump-sum payment at the end of the year is easier. 

These misconceptions can cause headaches and, if you're not careful, result in estimated tax penalties that can detract from your bottom line. 

All businesses – including non-W-2 gig-style workers – are responsible for quarterly estimated tax payments. Larger enterprises might be responsible for paying a larger tax estimate, but all businesses, with few exceptions, must pay.

Quarterly estimated tax payments are not optional, nor is it optional to make a lump-sum payment at the end of the year. The IRS will hit you with penalties that continue to accrue interest until the tax issue is resolved. On top of that, it can disrupt cash flow and budgeting. 

How a CPA can help manage quarterly tax payments

It can be difficult to accurately estimate and submit tax payments to the IRS, which is why some businesses use a CPA or other qualified tax professionals to handle it for them. When an accountant is on your side, they'll calculate and submit your tax payments and contribute to your overall tax planning. This also helps in identifying additional tax savings throughout the year. 

Quarterly Tax Payment FAQs 

Is there a benefit to paying my estimated taxes early?

Yes, there are benefits to paying these taxes early. Estimating and paying what you owe for the year allows you to get that debt out of the way. It provides a better picture of your cash flow, so you won't have to worry as much if your business experiences financial difficulties later. 

What happens if you pay too little estimated tax?

If you've underpaid your quarterly estimated taxes, you could receive a notice from the IRS with a penalty. They have a specific formula for determining that fee. If you handle your own quarterly estimated taxes and aren't confident in your calculations, it's always better to overpay than underpay. 

Can you get a refund on quarterly estimated taxes?

If you've overpaid your estimated taxes, the IRS will provide a refund. You won't be penalized for paying more than you owe and will sidestep penalties associated with an underpayment. 

Partner with 1-800Accountant for all of your quarterly tax needs

You can treat quarterly estimated taxes as a pain you'll have to live with, or you can get proactive and use them to help generate the insights you need to grow your business. That can be a challenge, which is why many small business owners and entrepreneurs trust 1-800Accountant, America's leading virtual accounting firm, for estimated tax help. 

Whether it's quarterly estimated taxes,tax advisory, or any of our affordable, tax-deductible accounting services, we have the solution you need to ensure compliance every quarter. Schedule a quick 30-minute consultation to get started.