Quarterly taxes catch most new coaches off guard. Here's exactly when to pay, how much to set aside, and how to make the process painless.
TL;DR
- Self-employed coaches pay taxes quarterly, not just at year-end.
- The four payment deadlines are April 15, June 15, September 15, and January 15.
- Set aside 25-30% of every coaching payment for taxes, in a separate savings account.
- Underpayment penalties apply if you pay too little quarterly; they're avoidable with simple planning.
- This article is general information, not tax advice. Consult a CPA for your specific situation.
Disclaimer: This article provides general educational information about self-employment taxes in the United States. It is not tax advice. Tax obligations vary based on income level, filing status, state, and individual circumstances. Consult a qualified tax professional for guidance specific to your situation.
Most coaches discover quarterly taxes the hard way. They finish their first year of coaching, file their taxes in April, and face a bill they weren't expecting, plus a penalty for not paying throughout the year. It's a jarring experience that's entirely preventable.
The US tax system is pay-as-you-go. When you're employed, your employer withholds taxes from each paycheck and sends them to the IRS on your behalf. When you're self-employed, that doesn't happen. You're responsible for calculating and paying your taxes yourself, four times per year.
Here's how to do it right.
Why Quarterly Payments Exist
The IRS wants tax money as income is earned, not all in one lump sum in April. For self-employed people, this means making estimated tax payments four times per year, roughly aligned with when that income was earned.
If you underpay significantly throughout the year, the IRS charges an underpayment penalty. As of 2024, this penalty is calculated at a percentage of the amount you underpaid, and it adds up.
The penalty isn't catastrophic, but it's avoidable. And more importantly, making quarterly payments prevents the end-of-year tax shock that derails coaching businesses that haven't planned for it.
The 2026 Quarterly Tax Deadlines
The four payment deadlines for 2025 income:
| Quarter |
Income Covered |
Due Date |
| Q1 |
January 1 - March 31 |
April 15, 2026 |
| Q2 |
April 1 - May 31 |
June 16, 2026 |
| Q3 |
June 1 - August 31 |
September 15, 2026 |
| Q4 |
September 1 - December 31 |
January 15, 2027 |
Note: the Q2 deadline covers only two months (April and May) because the IRS originally set these dates before the fiscal calendar was smoothed. This is just how it works.
If a deadline falls on a weekend or federal holiday, it moves to the next business day.
How Much to Set Aside
This is the most important practical question, and the answer is: more than most coaches initially assume.
Self-employed coaches pay:
Self-employment tax: 15.3% on net self-employment income (up to the Social Security wage base, approximately $168,600 in 2024). Above that threshold, only the Medicare portion (2.9%) applies. The deductible portion of self-employment tax (half of it) can be deducted on your return.
Federal income tax: Based on your taxable income and filing status. The 2024 brackets range from 10% on low income up to 37% on income above $609,350 (single filer). Most coaches fall in the 12-22% bracket range.
State income tax: Varies enormously by state. Some states (Texas, Florida, Nevada, Washington, among others) have no state income tax. Others range from under 5% to over 13%.
The simple rule: Set aside 25-30% of every coaching payment for taxes. If your state has significant income tax, lean toward 30%. If you're in a no-income-tax state, 25% may be sufficient.
Example: You receive a $3,000 client payment. Transfer $750-$900 immediately to a dedicated tax savings account. Don't touch it.
This isn't the mathematically precise calculation your CPA might provide. It's a practical reserve that prevents unpleasant surprises.
How to Calculate Your Quarterly Payments
The more precise approach uses one of two IRS "safe harbor" methods, either of which protects you from underpayment penalties.
Method 1: Pay 90% of your current year's tax liability, spread across four payments.
If you estimate you'll owe $20,000 in federal taxes for the year, your safe harbor is $18,000 (90%), or $4,500 per quarter. This requires estimating your annual income, which is difficult if your revenue is unpredictable.
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Method 2: Pay 100% of last year's tax liability (110% if your prior year AGI was over $150,000).
If you paid $15,000 in federal taxes last year, paying $15,000 across four equal quarterly payments ($3,750 each) satisfies the safe harbor, regardless of what you earn this year.
For new coaches with no prior-year baseline, estimating 90% of current-year liability (Method 1) is the only option. A simple approach: estimate your annual coaching revenue, subtract estimated business deductions, multiply the result by 25-30%, and divide by four.
Your CPA can calculate this precisely. If you use QuickBooks Self-Employed, the software estimates quarterly payments automatically based on connected income and expense data.
Where to Make Quarterly Payments
The simplest option: the IRS Direct Pay system (directpay.irs.gov). Free, no account required. Pay directly from your bank account.
Alternatively, the IRS EFTPS (Electronic Federal Tax Payment System) requires a one-time enrollment but allows you to schedule payments in advance, which prevents missing deadlines.
Some coaches also use IRS2Go (the mobile app) or pay by check with Form 1040-ES.
For state estimated taxes, you'll need to use your state's tax payment portal separately. Every state with income tax has an online payment system; search "[your state] estimated tax payment" for the specific URL.
The Tax Savings Account System
The simplest approach to quarterly taxes that actually works:
- Open a dedicated savings account labeled "Tax Savings" (or give it a nickname in your banking app)
- Each time you receive a coaching payment, transfer 25-30% to this account immediately
- Never use this account for anything except tax payments
- At each quarterly deadline, pay from this account
The key is making the transfer automatic and immediate, not a decision you make when money is in the account. Coaches who leave the tax amount sitting in their business checking account eventually spend some of it. The savings account creates a barrier.
After making your quarterly payment, any remaining balance in the tax savings account becomes a buffer for the next quarter or a year-end payment to cover any difference.
Business Deductions Reduce Your Tax Bill
Your estimated quarterly payments are based on your net income (revenue minus deductible expenses), not your gross revenue. Every legitimate business deduction reduces your taxable income and therefore your tax obligation.
This is why tracking expenses is so important. A coach with $80,000 in gross revenue and $20,000 in legitimate deductions owes taxes on $60,000, not $80,000. At a 30% effective rate, that's $6,000 in deductions alone saving $6,000 in taxes.
For the complete list of what coaches can deduct, see tax deductions for coaches.
What Happens If You Underpay
If you miss quarterly payments or pay less than required, the IRS charges an underpayment penalty. As of 2024, this rate is the federal short-term interest rate plus 3% (adjusts quarterly). In recent years, this has been around 8% annualized.
Missing one quarter's payment entirely on a $5,000 quarterly obligation would cost roughly $100-$200 in penalty. Not ruinous, but avoidable.
Beyond the penalty: if you get to year-end without having paid quarterly taxes and owe $15,000, you need to come up with that cash by April 15. If it's not there, you face not only the penalties but also interest on what you owe. The compounding effect of ignoring quarterly taxes gets painful fast.
Year-End Reconciliation
Even if you've been making quarterly payments, you'll still file an annual tax return in April. Your quarterly payments are estimates. The annual return calculates the exact amount owed.
If your quarterly payments were too high (because you earned less than estimated), you get a refund or a credit toward next year's first payment.
If your payments were too low (because you earned more than expected), you owe the difference when you file, plus potentially a small penalty if you significantly underpaid.
The goal is to end up close to zero owed at filing: not a massive refund (that's an interest-free loan to the government), and not a massive payment (that's poor planning).
For how this fits into the broader financial management of your coaching practice, see bookkeeping for coaches and coaching business finances.
