Quarterly Estimated Taxes
Definition
Tax payments made four times a year by individuals who don't have enough tax withheld from their income. This typically applies to self-employed individuals, freelancers, investors, and retirees. Payments are due April 15, June 15, September 15, and January 15. Failing to make estimated payments can result in an underpayment penalty.
Example
A freelance graphic designer earning $80,000/year would need to make quarterly estimated tax payments of roughly $5,000 each (covering federal income tax plus self-employment tax).