Guide to Quarterly Tax Obligations: Key Dates and Requirements for 2023 Tax Filing

When income goes undocumented by traditional withholding systems, the U.S. tax framework requires ongoing settlements throughout the year rather than one lump-sum payment at filing time. This approach—often called the “pay as you go” system—means that anyone earning investment returns, rental income, self-employment revenue, or retirement distributions without tax withholding must fulfill quarterly tax obligations to remain compliant with the IRS.

Who Must Handle Quarterly Tax Obligations?

Several income categories trigger the need for periodic payments during filing season:

Common scenarios requiring quarterly settlements:

• Investment income (dividends, interest, capital gains)
• Rental property returns
• Royalties and licensing fees
• Self-employment earnings
• Retirement account withdrawals without withholding
• Unemployment benefits
• Taxable Social Security distributions

Self-employed individuals and small business owners—sole proprietors, partners, and S-corp shareholders—almost always need to file quarterly obligations because business income flows through to personal returns without standard withholding mechanisms.

Who gets a pass:

You can skip quarterly tax obligations if your expected federal liability falls below $1,000 after accounting for credits and existing withholding. Alternatively, you’re exempt if your current withholding and credits equal at least one of these benchmarks:

• 90% of your 2023 tax liability
• 100% of your 2022 liability (if 2022 AGI was under $150,000; $75,000 if married filing separately)
• 110% of your 2022 liability (if 2022 AGI exceeded $150,000; $75,000 if married filing separately)

For farmers and fishermen deriving two-thirds or more of gross income from agriculture, the 90% threshold drops to 66.667%.

You’re also exempt if you had zero tax liability in the prior year, maintained U.S. residency throughout 2023, and that prior year spanned a full 12 months.

2023 Tax Year Filing Schedule: When Quarterly Obligations Are Due

Rather than true quarterly divisions, the IRS structures 2023 filing into four payment periods with distinct due dates. Payments aren’t required until you actually receive income subject to withholding gaps.

Payment periods and corresponding due dates:

If a standard due date falls on a weekend or federal holiday, it shifts to the next business day.

Real-world example: If you receive your first rental income check on August 15, your initial quarterly obligation isn’t due until September 15, 2023—you skip the earlier April and June deadlines entirely.

Special considerations for farmers and fishermen

Agricultural producers deriving at least two-thirds of income from farming or fishing can defer all 2023 payments until January 16, 2024. Alternatively, they can file their complete 2023 tax return by March 1, 2024, and settle everything at that time without making separate quarterly filings.

Natural disaster relief extensions

Taxpayers in federally designated disaster zones receive extended filing deadlines. Recent examples include victims of 2023 storms in Arkansas, California, Florida, Indiana, Mississippi, and Tennessee, who received deadline extensions ranging from July 31 to October 16, 2023.

Calculating the Amount You Owe

Step one: Determine total annual tax liability

Use the Estimated Tax Worksheet in Form 1040-ES instructions to project your total 2023 tax based on expected adjusted gross income, deductions, and credits. A practical starting point: review your 2022 return, then adjust for known changes (income shifts, life events, recent tax law modifications).

Step two: Divide into quarterly portions

For stable income streams, apply these percentages to your total estimated tax:

Annualized income method for variable earners

If your income fluctuates seasonally or irregularly, the annualized approach recalculates tax at the end of each payment period based on year-to-date earnings. This method, detailed in IRS Publication 505, can reduce or eliminate liability for certain quarters. You’ll need to file Form 2210 with your tax return if you use this election.

Payment Methods and Processing

The IRS accepts multiple submission channels for quarterly tax obligations:

• Electronic bank transfer: Direct debit from your checking or savings account
• Debit or credit card: Online or phone payments (processing fees apply)
• Paper check or money order: Mailed with Form 1040-ES
• Cash deposits: At authorized IRS retail partners (limited to $1,000 per transaction; online pre-registration required at fed.acipayonline.com)
• Refund application: Direct all or part of a prior-year refund toward current-year filing obligations (executed when filing prior year’s return)

You can alternatively pay your entire year’s obligation in one lump sum by the first payment deadline, rather than spreading payments across four dates.

Consequences of Underpayment

Failing to remit quarterly tax obligations triggers cumulative penalties assessed separately for each missed or insufficient payment. The IRS can impose both an underpayment penalty and interest charges. Interestingly, you may still owe penalties even if you ultimately receive a refund when filing your 2023 return.

The IRS calculates penalties automatically and bills you separately unless you use the annualized method. To self-calculate, complete Form 2210 (Form 2210-F for farmers and fishermen) and attach it to your return. The agency won’t charge interest on penalties paid by the bill’s due date.

Penalty waiver eligibility:

You may request full or partial penalty relief if:

• You retired after age 62 or became disabled during 2023 or 2022, and the underpayment resulted from reasonable cause rather than willful neglect
• The shortfall stemmed from casualty, disaster, or unusual circumstances that would make penalty assessment inequitable

Waiver requests require Form 2210 or 2210-F submission, though approval isn’t guaranteed—final determination rests with the IRS.

State-Level Quarterly Filing Obligations

Nine states impose no broad-based income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Residents there skip state-level quarterly filings.

All other states requiring general income tax typically mandate state-level “pay as you go” compliance through withholding or periodic settlements. State rules differ significantly from federal requirements, so consult your state tax authority for specific deadlines and calculation methods applicable to your situation.

Bottom line: Understanding when filing estimated taxes is required, calculating accurate quarterly amounts, and selecting appropriate payment methods protects you from cumulative IRS penalties and interest. Whether you’re self-employed, earning investment income, or receiving retirement distributions without withholding, staying current on 2023 tax year obligations ensures smooth compliance.