Is it time to switch to paying quarterly taxes? Here’s when to decide, and how to get it done.

There’s one day each year that sticks out to American taxpayers everywhere: Tax Day. But to another group of people -- the ones who make quarterly payments -- there are three other times a year to pay up.

Quarterly taxes are often how self-employed individuals, freelancers and independent contractors pay up.

So, how do you know if paying quarterly is right for you, or when it might be time to switch to doing so?

Paying quarterly taxes

According to the IRS, the time to make quarterly estimated tax payments is if both of the following apply:

1. You anticipate owing at least $1,000 in taxes for the current tax year, after subtracting your withholding and refundable credits.

2. You expect your withholding and refundable credits will be less than the smaller of:

• 90% of the tax to be shown on your prior year’s tax return, or
• 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

Quarterly taxes due dates

There are four due dates for quarterly taxes:

Figuring out how much you owe

If it sounds like quarterly taxes might be the way to go for you, you’ll need to figure out which tax bracket you fall under. You can find yours below.

It’s worth mentioning that the self-employment tax is generally 15.3% of your net income.

So, let’s figure out how to estimate what you’ll owe each quarter.

Dave Ramsey, finance adviser, radio show host, author, and businessman, provided a helpful example on his website of how you can estimate your taxes.

If you expect to bring in $50,000 in gross self-employed income, after deducting business expenses, you estimate your taxable income will be about $35,000.

Using Dave Ramsey’s example, at the current tax rate, you’d owe about $4,000 in income taxes. But with self-employment tax at about 15.3% of your net income, that means you’ll owe another $4,950 for the year.

Add the income tax and self-employment tax together and you’ll get your estimated taxes.

Income tax: $4,000

+ Self-employment tax: $4,950

Estimated annual taxes: $8,950

Because you’ll owe more than $1,000 in taxes, you’ll want to base your quarterly taxes on the estimated annual taxes.

Divide $8,950 by 4 and you come up with $2,238.

Paying your estimated quarterly taxes

After you estimate the quarterly taxes you’ll pay, you can pay online at the IRS payment page, where you can also set up online payments.

You can also pay by phone, app, cash or check.

Getting back to annual taxes

Because the quarterly payments are estimated, you’ll still need to file an annual tax return, showing what you actually made through the year.