Freelancers and Taxes: It's September 15 -Here's How to Use Safe Harbor Before Year-End

Today is September 15, which means the third-quarter estimated tax payment deadline is here (payments must be made or postmarked by the end of the day). If you're a freelancer or self-employed and haven't made your payments, this is a good time to get in the know :)

There are lots of reasons people make estimated tax payments (significant capital gains, no withholdings on Social Security, etc.), but this post is focused just on freelancers / self-employed creators — people who do not have taxes withheld from their pay and whose income can fluctuate from quarter to quarter.

👉 Quick reminder: Estimated tax payments are due on April 15, June 15, September 15, and January 15 (not every quarter).

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Choose Your Own Adventure: How to Handle Estimated Taxes

Here’s the setup:

• 2024 net income: $70,000 → taxes ≈ $17,500

• 2025 net income estimate: $80,000 → taxes ≈ $20,500

Now, what could you do?

Option A: Skip everything until April

• Pay $0 in estimates until filing

• April 2026 bill: ~$20,500 + penalties & interest

• Penalties? Yes. (Estimate $1,100 for Federal taxes)

• Stress level: Stressful; big lump sum; likely penalties

Option B: Use 100% of 2024’s tax (Safe Harbor)

• Divide $17,500 by 4 → ~$4,375 per quarter

• April 2026 bill: ~$3,000 owed

• Penalties? No

• Stress level: Much more manageable; cash flow smoother

Option C: Use 90% of 2025’s estimated tax (Safe Harbor)

• Pay ~$18,450 over four estimates

• April 2026 bill: ~$2,050 owed

• Penalties? No

• Stress level: Best alignment with higher income; but requires accurate projections

💡 Note: If your 2024 AGI was over $150,000, you'll need to pay 110% of last year's tax (instead of 100%) to qualify for safe harbor protection.

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Timing Matters: What If You're Behind?

Let’s say you skipped the June 15 payment and are just reading this now.

• The good news: You can still avoid penalties on future quarters by making payments going forward.

• The reality: You’ll likely face penalties on the missed quarter, but they’re calculated separately for each quarter. If you missed June but pay September and January on time, you’ll only be penalized for June.

• Best move: Pay something today (even if not the full quarterly amount) and continue with regular payments. The IRS penalty is based on how much you underpaid and for how long, so paying late is always better than not paying at all.

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My Opinion & Recommendation

If you're the type who says, "I'll skip estimates and just pay it all in April", here's what I strongly suggest instead:

• Adopt Option B: use 100% of last year's tax liability, divide by 4, and make quarterly payments. No guesswork, no major surprises, no penalties.

• ⚠️ Yes — this option may result in a larger payment in April if your income rises, but that’s still far better than nothing + penalties + stress.

And if you truly have cash and want it over with:

• You can pre-pay your estimated tax in full (or front-load some payments). The IRS will apply it across the year.

• Just remember: you’re giving the government an interest-free loan. If the peace of mind is worth it, go for it — but make sure it doesn’t hurt your business cash flow.

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Don’t Forget SE Tax

As a freelancer, one of the biggest surprises is the Self-Employment (SE) Tax — you’re paying both the employer and employee halves of Social Security and Medicare (about 15.3% on ~92.35% of your net income).

In our example, out of the total $20,500 in taxes, $11,304 is SE tax ($80,000 × 0.9235 × 0.153).

That SE tax gets added on top of your income tax — it’s a huge piece of the bill and a major reason why freelancers need to plan ahead.

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How to Pay Estimated Taxes

You’ve got options:

• • IRS Direct Pay (https://www.irs.gov/payments/direct-pay) — the easiest way to send a payment straight from your bank account, no login required.

  • EFTPS (Electronic Federal Tax Payment System) — best if you want to schedule payments in advance; requires a setup process.

  • Check or Money Order — old school, but you’ll need to mail it with a voucher (Form 1040-ES) and have it postmarked by the deadline.

  • State Payments — if your state has income tax, you’ll need to pay through your state’s tax authority website separately.

  💡 Tip: Always keep a record (screenshot or confirmation number) of your payment. If the IRS ever says you didn’t pay, you’ll want proof.— the easiest way to send a payment straight from your bank account, no login required.

Final Thoughts

• Since today is September 15, the third-quarter deadline is here. If you haven’t made payments yet, use the safe harbor based on last year — it’s the least risky move.

• Even if you’re late, making something now reduces penalties.

• For next year: track your income monthly, estimate early, and don’t underestimate how fast things can shift.

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Note: Tax amounts shown are estimates and will vary based on filing status, deductions, and other factors. To keep these examples simple, I’ve left out other income sources such as dividends, interest, or capital gains, which would affect the final calculation. Consult a tax professional for your specific situation.