Key Takeaways

  • S corp quarterly taxes are typically required if you expect to owe $1,000 or more in federal tax for the year.
  • Shareholders pay tax on their share of S corp profits via estimated payments, often using Form 1040-ES.
  • Payments are due in four installments: April 15, June 15, September 15, and January 15.
  • The IRS safe harbor rule helps avoid penalties if you pay at least 90% of your current year tax or 100–110% of last year’s tax.
  • Forms 1120S, Schedule K-1, Form 941, and Form 940 may also be required depending on your payroll and filing situation.
  • Strategies like calculating based on prior-year taxes, using accounting software, or setting aside funds regularly can make quarterly payments easier.

S corp estimated tax payments are only necessary if you have an S corp. When you own a business, tax season does not last for one day. Rather, you must pay a series of taxes as the year progresses.

If you work for an employer, he or she most likely holds your taxes throughout the year. If you are self-employed, or own your own business, you would pay taxes to your state and the IRS. The IRS will not issue warnings about estimated tax payments. Partially, this is because the balance owed is not clear until you file a tax return.

If you intend to file as self-employed or a disregarded entity, you need to complete Form 1040-ES. Form 1040-ES also has blank vouchers so you can mail in your estimated payments. You may also make payments via the Electronic Federal Tax Payment System.

Estimated Payment Scenarios

You owe $1,000 or greater in taxes when filing an income tax return. You may need to make estimated payments to the IRS and your state government as well. With that, you may come across an exception if the withholdings and credits amount to as much as your previous tax year. Therefore, you would not have to make federal estimated payments. Such a scenario would apply to the following business entities:

  • Sole proprietorships
  • S corp shareholders
  • Single-member LLCs that choose to taxed as an S corp or partnership

Another scenario is if you are a corporate owner who needs to make estimated payments if you would owe $500 or greater upon tax filing. If the business is an S corp or multiple-member LLC, your portion of the business profits would be shown on Schedule K-1, a form that’s included with your personal return.

Safe Harbor Rules and Avoiding Penalties

To minimize the risk of underpayment penalties, the IRS provides a “safe harbor” for estimated taxes. You can avoid penalties if your payments equal at least 90% of the current year's total tax liability or 100% of the prior year’s total tax (110% if your adjusted gross income exceeded $150,000). This approach can be especially helpful if your income fluctuates, as you can base payments on last year’s results even if your current income is unpredictable.

Additionally, penalties apply if your payments are late or insufficient, so it’s crucial to review your tax liability each quarter. If your S corp experiences seasonal or irregular income, consider making larger payments in higher-earning quarters to avoid shortfalls later in the year.

Payment Factors

You may also need to pay estimated taxes in the following circumstances:

Estimated payments are portioned into four payment intervals throughout the year:

  • April 15: Income for January 1 through March 31
  • June 15: Income for April 1 to May 31
  • September 15: Income for June 1 to August 31
  • The following January 15: Income from September 1 to December 31

Once the IRS has your business in the system, officials will send estimated payment vouches at the end of every tax year. With that, you must still pay the federal and state taxes, even if you do not receive the vouchers.

Strategies for Managing S Corp Quarterly Taxes

Staying on top of S corp quarterly taxes is easier when you have a structured plan:

  • Automate Your Payments: Use the IRS Electronic Federal Tax Payment System (EFTPS) to set up recurring reminders or payments.
  • Set Aside Funds Monthly: Transfer a percentage of your business income into a separate tax account each month to avoid cash flow issues at payment time.
  • Use Accounting Software: Programs like QuickBooks or Xero can estimate your quarterly obligations and track payment deadlines.
  • Consult a Tax Professional Mid-Year: A mid-year check-in allows adjustments if your income or deductions change significantly.

Good recordkeeping is essential. Keep detailed profit and loss statements, payroll records, and documentation for deductible expenses to ensure accurate estimates and simplify filing.

Required Forms

Your business must also report all business activity via Form 1120S and include a Schedule K-1 for all shareholders. Schedule K-1s note the shareholder’s portion in the business so they report such information on their personal tax returns. If an S corp cannot file by March 15, the business can apply for a six-month extension that’s automatic. You must use Form 7004 and send it to the IRS to get an extension.

Shareholders who pay business income tax must adhere to the same deadlines as individual taxpayers, which is April 15. If the S corp pays a wage to employees, the S corp must withhold federal taxes in the form of Medicare and Social Security taxes. Such withholdings require Form 941 and must be filed every quarter to note aggregate amounts of withholding. Form 941 is due on the following dates:

  • January 31
  • April 30
  • July 31
  • October 31

The addition of employees requires Form 940 to file a Federal Unemployment Tax Return on a yearly basis. If the business pays wages amounting to $1,500 or greater during any calendar quarter, or has a minimum of one employee working at least a portion of the day or 20 or more weeks, the business must submit Form 940.

Form 940 notes the wage amount that an S corp owes in unemployment taxes to the IRS. You must submit Form 940 by January 31 annually. If your business pays its entire tax balance on time, you do not have to file Form 940 until February 10.

State Quarterly Tax Requirements

In addition to federal estimated tax obligations, many states require separate quarterly payments. These state deadlines often align with federal due dates but can differ in calculation methods and payment portals. Some states also require estimated state income taxes from shareholders based on their share of S corp income, even if the business itself doesn’t pay entity-level income tax.

Failure to meet state estimated payment rules can result in interest and penalties similar to federal rules. Check your state’s Department of Revenue or taxation authority for:

  • State-specific forms (often separate from IRS Form 1040-ES)
  • Payment thresholds and due dates
  • Electronic payment system options

If your S corp has operations in multiple states, you may need to make estimated payments in more than one jurisdiction.

Frequently Asked Questions

  1. Who is required to pay S corp quarterly taxes?
    Shareholders must pay estimated taxes if they expect to owe $1,000 or more for the year, based on their share of the S corp’s income.
  2. What forms are needed for S corp quarterly tax payments?
    Typically, shareholders use Form 1040-ES for estimated payments, while the S corp files Form 1120S, issues Schedule K-1s, and files payroll forms if applicable.
  3. What happens if I miss a quarterly tax payment?
    The IRS may charge penalties and interest for underpayment or late payment, even if you pay the full amount at year-end.
  4. Are state quarterly tax payments required for S corps?
    Yes, many states require estimated payments, and rules vary by state. Deadlines often match federal dates but may differ in calculation.
  5. How can I simplify paying S corp quarterly taxes?
    Use accounting software, automate payments through EFTPS, set aside funds regularly, and schedule mid-year reviews with a tax professional.

If you need to learn more about S corp estimated tax payments, submit your legal inquiry to our UpCounsel marketplace. UpCounsel’s lawyers have graduated from some of the best law schools in the country and will help you through the ins and outs of tax filings and business expenses. In addition, they will be at your side if you are unsure about the S corp filling process.