If you’re a small business owner, freelancer, or self-employed professional in Conway, the third-quarter estimated tax deadline is one date you don’t want to miss. Unlike W-2 employees who have taxes withheld automatically, self-employed individuals and many business owners are responsible for paying estimated taxes throughout the year — and the Q3 payment is due September 15. At Peavy & Associates, we help clients avoid penalties and cash-flow surprises by planning ahead of this deadline, not scrambling the week before.

Here’s what you need to know.

Who Needs to Pay Quarterly Estimated Taxes?

Generally, you’re required to make estimated tax payments if you expect to owe $1,000 or more in tax for the year after subtracting withholding and refundable credits. This typically applies to:

• Self-employed individuals and freelancers
• Small business owners (sole proprietors, partners, S-corp shareholders)
• Individuals with significant investment, rental, or side income
• Anyone whose W-2 withholding doesn’t cover their total tax liability

The 2026 Estimated Tax Deadlines

The IRS splits estimated taxes into four payment periods across the year, and Q3 covers income earned from June through August, due September 15, 2026. Missing this deadline — or underpaying — can trigger IRS penalties even if you pay the full amount owed when you file your annual return.

How to Calculate Your Q3 Payment

There are two common approaches:

• The safe harbor method — paying based on 100% (or 110% for higher earners) of last year’s tax liability, divided across four payments. This protects you from underpayment penalties even if your income fluctuates.
• The current-year method — estimating your actual 2026 income and calculating tax owed for the year to date. This is more accurate but requires more up-to-date bookkeeping.

For business owners with income that varies quarter to quarter, a mid-year check-in on actual earnings is important — overpaying ties up cash flow, and underpaying leads to penalties.

Common Q3 Estimated Tax Mistakes

• Basing payments on last year’s numbers without adjusting for a significantly better or worse year
• Forgetting self-employment tax (Social Security and Medicare) in the calculation, not just income tax
• Missing the deadline entirely because it doesn’t align with a typical “tax season” mindset
• Not accounting for state estimated taxes in addition to federal

Why Q3 Is a Good Checkpoint, Not Just a Deadline

Beyond simply making the payment, September is a smart time to look at how the year is trending overall. If revenue is up or down significantly from projections, adjusting your Q3 and Q4 payments accordingly can prevent a large balance due — or an unnecessarily large refund — at filing time.

Let Peavy & Associates Handle the Calculations

Estimated tax calculations get complicated quickly, especially for business owners juggling fluctuating income, multiple income streams, or a first year of self-employment. Peavy & Associates in Conway, SC can review your year-to-date numbers and make sure your Q3 payment is accurate — not just a guess.

Contact us before September 15 to get your estimated payment right.

It doesn’t matter whether it’s time to pay your personal taxes or your business taxes, it’s easy to run afoul of the IRS. There are some common types of tax penalties that you may incur if you don’t stay focused. The following are the most common tax penalties you need to avoid.

Bad Checks

If you write a check to pay your taxes and the funds aren’t available when the IRS tries to withdraw the money, you can be penalized a set amount or the full amount of the check you wrote.

Charitable Contributions

Anyone caught operating for-profit activities while claiming the endeavor as a charitable organization will face considerable penalties. Non-profits that are caught operating for-profit activities can lose their tax exempt status.

Failure to File

There are some taxpayers that aren’t required to file a return, but if you do have to file, you need to do so by a specific date or file for an extension. An extension gives you six more months to file, but won’t absolve you from the need to pay any taxes owed by the usual deadline.

Failure to Pay

When you owe taxes to the IRS, you have 21 days to pay the entire amount. If you don’t, the IRS will charge you ½ of 1 percent per month on the amount you owe.

Fraud

Fraud occurs when you don’t report all your income or inflate the number of deductions you have to lower your taxes. The IRS can penalize you by 75 percent of what you actually owe and/or have you jailed. The IRS receives a copy of your earnings every year, just as you do.

Late Payments

If you fail to pay a balance owed the IRS by the filing deadline, there will be financial penalties that will be added to what you already owe. Those penalties accrue compound interest each month that they go unpaid.

Social Security Number

You have to provide a Social Security number for yourself, spouse, and anyone you claim as a dependent. You must disclose those numbers or face penalties for each instance of non-compliance.

Underpayment

For individuals that estimate their tax burden, you’ll incur a fine if you fail to pay the entire amount. There is also a fine for underestimating what you owe. The fine will be added to the amount you owe the next time you’re required to file.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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