How to File Quarterly Estimated Taxes as a New Medical Practice
Learn the step-by-step process for filing quarterly estimated taxes as a new medical practice, including deadlines, calculations, and payment methods.
If you own a new medical practice, you must pay quarterly estimated taxes to the IRS. This guide explains exactly how to calculate and file them, with current figures and practical steps you can take this week.
Why Quarterly Estimated Taxes Matter
As a practice owner, you are not an employee with taxes withheld from a paycheck. Instead, you are responsible for paying income tax and self-employment tax (Social Security and Medicare) throughout the year. The IRS requires quarterly payments if you expect to owe at least $1,000 in tax after subtracting withholding and credits. For most new practices, that threshold is easily met.
Failing to pay on time can result in penalties, which are calculated based on the amount you underpaid and the number of days late. The current penalty rate is around 7% per year, compounded daily. Avoid this by staying on schedule.
Step 1: Estimate Your Taxable Income
Start by projecting your practice’s net income for the year. Net income is your gross revenue minus deductible business expenses. Common deductions for medical practices include:
- Staff salaries and benefits
- Medical supplies and equipment
- Rent and utilities
- Malpractice insurance
- Continuing education and licensing fees
- Marketing and advertising
- Software subscriptions (e.g., EHR, billing)
Use your profit and loss statement from the previous quarter, if available, or create a simple forecast. For a new practice, you may not have historical data. In that case, estimate conservatively based on your business plan and current patient volume.
Step 2: Calculate Your Estimated Tax
Your estimated tax includes both income tax and self-employment tax. Here is how to calculate it:
- Net income: Estimate your annual net profit.
- Self-employment tax: Multiply net income by 15.3% (12.4% for Social Security plus 2.9% for Medicare). This applies to the first $168,600 of net income in 2026, with an additional 0.9% Medicare surtax on income over $200,000 (single) or $250,000 (married filing jointly).
- Income tax: Apply your marginal federal tax rate. For a married couple filing jointly, rates start at 10% and go up to 37%. Use the IRS tax tables or a tax calculator to estimate.
- Add the two amounts: This is your total annual estimated tax.
- Divide by 4: This gives your quarterly payment.
For example, if your projected net income is $100,000, your self-employment tax is $15,300. Your income tax might be around $12,000, depending on deductions. Total tax is $27,300, so each quarterly payment is $6,825.
Step 3: Know the Deadlines
Quarterly estimated tax payments are due on the following dates for the 2026 tax year:
| Quarter | Payment Period | Due Date |
|---|---|---|
| Q1 | Jan 1 - Mar 31 | April 15, 2026 |
| Q2 | Apr 1 - May 31 | June 15, 2026 |
| Q3 | Jun 1 - Aug 31 | September 15, 2026 |
| Q4 | Sep 1 - Dec 31 | January 15, 2027 |
If a due date falls on a weekend or federal holiday, the deadline moves to the next business day. Mark these dates on your calendar now.
Step 4: Choose a Payment Method
The IRS offers several ways to pay. All are secure and convenient:
- IRS Direct Pay: Free, online, and allows you to pay directly from your bank account. You can schedule payments up to 30 days in advance.
- EFTPS (Electronic Federal Tax Payment System): Free, but requires enrollment. Best for businesses that pay regularly.
- Credit or debit card: Convenient, but the IRS charges a processing fee of about 1.87% to 2.5% of the payment amount.
- Check or money order: Mail with Form 1040-ES voucher. Slower and less secure, but acceptable.
For most new practices, IRS Direct Pay is the quickest and easiest option. You will need your bank account and routing numbers, plus your Social Security number or EIN.
Step 5: Pay Your State Estimated Taxes
Most states also require quarterly estimated tax payments for practice owners. Check with your state’s department of revenue for deadlines and forms. Many states align with federal deadlines, but not all. For example, California requires payments in April, June, September, and January, similar to the IRS. Others, like Texas, have no state income tax, so you may not need to file.
Visit your state’s tax website or consult a CPA to confirm your obligations.
Step 6: Track and Adjust Each Quarter
Your initial estimate may be off. As the year progresses, compare your actual income to your projection. If you earn more than expected, increase your next quarterly payment to avoid a large balance due. If you earn less, you can reduce your payment, but be careful not to underpay and trigger penalties.
The IRS allows you to adjust payments each quarter. Use Form 1040-ES to recalculate, or simply pay a different amount via Direct Pay. Just ensure your total payments for the year meet the safe harbor rule: pay at least 100% of your previous year’s tax liability (110% if your adjusted gross income was over $150,000), or 90% of your current year’s liability, to avoid penalties.
FAQ
What if I miss a quarterly deadline?
You will owe interest and possibly a penalty on the underpayment. The penalty is based on the amount you underpaid and the time it was outstanding. File and pay as soon as possible to minimize the penalty. The IRS may waive penalties if you have a reasonable cause, such as a serious illness or natural disaster, but you must request it in writing.
Can I pay estimated taxes from my business account?
Yes, you can pay from any bank account. However, it is wise to keep your business and personal finances separate for accounting clarity. Use your business account for business expenses and tax payments, and track them in your bookkeeping.
Do I need to file Form 1040-ES?
Form 1040-ES is the worksheet used to calculate your estimated tax. You do not need to mail it unless you are paying by check. If you pay online via Direct Pay or EFTPS, you do not need to file the form, but keep a record of your calculations.
What happens if I overpay my estimated taxes?
You will receive a refund when you file your annual tax return, or you can apply the overpayment to next year’s estimated taxes. Overpaying is not a problem, but it means you gave the government an interest-free loan. Aim to pay close to your actual liability.
Related guides
- How Much Should a New Medical Practice Set Aside for Taxes?
- S-Corp vs LLC for New Medical Practices: Which Saves More on Taxes?
- What Taxes Does a New Medical Practice Pay? A Complete Guide
The bottom line
Filing quarterly estimated taxes as a new medical practice is straightforward if you follow a systematic process. Estimate your net income, calculate your tax, pay by the deadlines, and adjust as needed. Use IRS Direct Pay for convenience, and track your payments carefully. If you are unsure about your calculations, consult a CPA who specializes in medical practices. They can help you optimize deductions and avoid costly mistakes. Start today by projecting your income and setting up your first payment.