Quarterly Estimated Taxes for Crypto Income

The single most common painful surprise for crypto freelancers is the underpayment penalty. You did nothing dishonest — you just did not know the US tax system expects to be paid four times a year, not once. Here is how quarterly estimated taxes work and how to stay out of trouble.

Why quarterly payments exist

Employees have tax withheld from every paycheck automatically. Freelancers and crypto earners do not. To keep the system “pay as you go,” the IRS requires estimated tax payments from people whose income is not withheld.

The four 2026 deadlines

• April 15, 2026 — for income earned January–March
• June 15, 2026 — for income earned April–May
• September 15, 2026 — for income earned June–August
• January 15, 2027 — for income earned September–December

The periods are uneven on purpose — note that the second “quarter” is only two months.

How much should you pay?

A safe approach for most freelancers: estimate your total tax for the year (income tax + 15.3% self-employment tax + state tax), then pay one quarter of it on each date. The calculator on the home page does this math for you and shows a per-quarter figure directly.

The penalty trap

The underpayment penalty is essentially interest on the tax you should have paid earlier. It is not enormous, but it is entirely avoidable and it compounds. Worse, many freelancers do not discover it until they file — by which point it is too late to fix that year.

A simple system that works

1. Open a separate “tax” savings account.
2. Every time a crypto payment arrives, immediately move 25–30% into it.
3. On each deadline, pay your estimate from that account using IRS Direct Pay.
4. Never touch that account for anything else.

This converts a stressful annual scramble into four boring transfers.

Canada note

Canada has a similar instalment system for people who owe more than a threshold in tax. The CRA sends instalment reminders, but crypto freelancers should plan for it the same way: set money aside as income arrives.

Bottom line

Estimate your full-year tax, divide by four, pay on the four deadlines from a dedicated account. Use the calculator below to get your per-quarter number in seconds.