Quarterly estimated taxes for online sellers: a plain-English guide
General information, not tax advice. Tax rules depend on your situation and change often. This page summarizes publicly available IRS guidance for US federal taxes. Talk to a qualified tax professional before making decisions, and check your state's rules separately.
When you work a W-2 job, your employer withholds tax from every paycheck. When you sell on Etsy, Shopify, or Amazon, nobody does that for you. The IRS still expects tax to be paid as income is earned during the year — which, for most self-employed sellers, means quarterly estimated tax payments. Missing them can lead to an underpayment penalty, and the bigger risk is a surprise bill in April that you have not saved for.
Sources: IRS Form 1040-ES (2026), the IRS estimated tax FAQ, and Publication 505, checked October 2026.
Who generally needs to pay estimated tax?
According to the IRS, individuals — including sole proprietors and single-member LLC owners — generally must make estimated payments if they expect to owe at least $1,000 in federal tax for the year after subtracting withholding and refundable credits. If your seller income is a side business and you also have a job, increasing your W-4 withholding at work can be an alternative to making separate estimated payments.
2026 estimated tax due dates
| Income earned | Payment due |
|---|---|
| Jan 1 – Mar 31, 2026 | April 15, 2026 |
| Apr 1 – May 31, 2026 | June 15, 2026 |
| Jun 1 – Aug 31, 2026 | September 15, 2026 |
| Sep 1 – Dec 31, 2026 | January 15, 2027 |
Notice the "quarters" are not equal — the second covers only two months. If a due date falls on a weekend or legal holiday, the payment is on time if made the next business day. Per Form 1040-ES, you can skip the January 15, 2027 payment if you file your 2026 return by February 1, 2027 and pay the full balance with it.
What taxes are you estimating?
Self-employment tax
Self-employment (SE) tax covers Social Security and Medicare for people who work for themselves. The combined rate is 15.3% (12.4% Social Security up to the annual wage base, plus 2.9% Medicare), applied to 92.35% of your net profit. Additional Medicare tax can apply at higher incomes. You generally owe SE tax if your net self-employment earnings are $400 or more.
Income tax
Your seller profit is added to your other income and taxed at your ordinary rates. Half of your SE tax is deductible in figuring adjusted gross income, and some sellers may qualify for the qualified business income deduction — a tax professional can tell you what applies.
State tax
Most states with an income tax have their own estimated payment schedule. Check your state revenue department's website.
"Safe harbor": avoiding the underpayment penalty
Under IRS rules described in Form 1040-ES and Publication 505, you generally will not owe an underpayment penalty if your total withholding and timely estimated payments are at least the smaller of:
- 90% of the tax shown on your 2026 return, or
- 100% of the tax shown on your 2025 return (110% if your 2025 adjusted gross income was more than $150,000, or $75,000 if married filing separately).
The prior-year option is popular with growing sellers because it is a known number: divide it by four and pay that each quarter. You may still owe more in April if your business grew, but you generally avoid the penalty — so you still need the cash set aside.
A simple way to set cash aside
Many sellers move a fixed percentage of profit (not revenue) into a separate savings account every time they get paid out. A common starting point people use is 25–30% of net profit, but the right number depends on your bracket, state, deductions, and other income. A rough illustration only:
| Quarter profit | Set aside at 25% | Set aside at 30% |
|---|---|---|
| $3,000 | $750 | $900 |
| $8,000 | $2,000 | $2,400 |
| $15,000 | $3,750 | $4,500 |
The key is profit. Revenue minus marketplace fees, cost of goods, shipping, ads, and other business expenses. If you set aside a percentage of gross sales, you will over-save; if you forget expenses entirely, you will be guessing. See how to calculate COGS and our breakdowns of Etsy fees, Shopify margin, and Amazon FBA fees to get profit right.
About 1099-K forms
Marketplaces and payment processors may send you a Form 1099-K reporting your gross payments. The reported amount is gross — it includes fees, shipping, and refunds — so it will be higher than your profit. You report your actual business income and expenses (typically on Schedule C), and good records make reconciling the 1099-K straightforward. Reporting thresholds have changed several times in recent years; check the IRS 1099-K page for the current rule.
How to pay
The IRS accepts estimated payments through your IRS Online Account, IRS Direct Pay (from a bank account), EFTPS, debit/credit card (processor fees apply), or a mailed check with a 1040-ES voucher. Keep confirmation numbers with your records.
A quarterly routine that works
- Each month, record revenue, fees, COGS, and expenses.
- Each payout, transfer your set-aside percentage of profit to a separate account.
- Two weeks before each due date, compare what you have saved to your estimate or safe-harbor amount.
- Pay, record the confirmation, and adjust next quarter's percentage if needed.
More seller guides
- Etsy fees explained: what Etsy actually takes from each sale
- How to calculate your Shopify profit margin (and what a good one looks like)
- Amazon FBA fees in 2026: what you pay and how to estimate it
- How to calculate COGS (cost of goods sold) for your online store
SellerSheetKit is not affiliated with Etsy, Shopify, or Amazon. Fee figures are summarized from official sources on the date above and can change; verify against your seller account. Educational content only — not tax, legal, or accounting advice.