How to File Quarterly Estimated Taxes as a New Midwifery Practice
Learn the step-by-step process for filing quarterly estimated taxes as a new midwifery practice, including deadlines, calculations, and payment methods.
If you’ve started a midwifery practice, you’re likely self-employed or an LLC owner, which means the IRS expects you to pay taxes on your income throughout the year, not just once at tax time. Quarterly estimated taxes are how you do that. This guide walks you through the exact steps, deadlines, and calculations you need to stay compliant and avoid penalties.
Why You Need to Pay Quarterly Estimated Taxes
As a new midwifery practice, you are not an employee with taxes withheld from a paycheck. Instead, you are responsible for paying your income tax and self-employment tax (which covers Social Security and Medicare) directly to the IRS. The IRS requires you to pay these taxes in four installments throughout the year. If you don’t, you may face underpayment penalties, which can add up quickly.
For the 2026 tax year, the self-employment tax rate is 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings. You also owe federal income tax, which depends on your taxable income bracket. Most new practices should plan to set aside 25% to 35% of their net income for taxes.
Step 1: Estimate Your Annual Income and Deductions
Before you can calculate your quarterly payments, you need a realistic estimate of your practice’s net income for the year. Net income is your total revenue minus allowable business expenses. Common deductions for a midwifery practice include:
- Office rent or home office deduction
- Malpractice insurance premiums
- Medical supplies and equipment
- Continuing education and certifications
- Marketing and website costs
- Software subscriptions (e.g., EHR, billing)
- Travel for home births or hospital visits
If you’re just starting, use your business plan or first few months of actual income to project the full year. Be conservative: it’s better to overestimate slightly and get a refund than to underpay and face penalties.
Step 2: Calculate Your Estimated Tax Using Form 1040-ES
The IRS provides Form 1040-ES, which includes a worksheet to help you calculate your estimated tax. Here’s the simplified process:
- Estimate your adjusted gross income (AGI) for the year.
- Subtract your standard deduction (for 2026, the standard deduction is $14,600 for single filers, $29,200 for married filing jointly).
- Calculate your taxable income.
- Apply the tax brackets to find your income tax.
- Add self-employment tax: multiply your net earnings by 15.3%.
- Subtract any credits (e.g., the Qualified Business Income deduction, which is 20% of your qualified business income).
- Divide by 4 to get your quarterly payment.
For example, if your projected net income is $60,000, your self-employment tax is about $9,180. Your income tax might be around $5,000, depending on deductions. Total tax could be $14,180, so each quarterly payment would be roughly $3,545.
If you’re unsure, use the IRS Tax Withholding Estimator online or consult a CPA who works with healthcare practices.
Step 3: Know the Payment Deadlines
Quarterly estimated taxes are due on these dates for the 2026 tax year:
| Payment Period | Due Date |
|---|---|
| January 1 - March 31 | April 15, 2026 |
| April 1 - May 31 | June 15, 2026 |
| June 1 - August 31 | September 15, 2026 |
| September 1 - December 31 | January 15, 2027 |
If a due date falls on a weekend or holiday, the deadline moves to the next business day. Mark these dates on your calendar and set reminders.
Step 4: Choose a Payment Method
The easiest way to pay is through the IRS Direct Pay system at irs.gov. You can pay directly from your bank account for free. You’ll need your Social Security number or EIN, and you’ll select the tax year and form (1040-ES). You can also pay by credit card, but the IRS charges a processing fee (around 1.85% to 2.9%).
Alternatively, you can mail a check with Form 1040-ES voucher, but this is slower and riskier. Electronic payment gives you instant confirmation and reduces the chance of errors.
Step 5: Adjust Your Payments as Income Changes
Your initial estimates may be off. If your income increases or decreases significantly during the year, you can adjust your remaining quarterly payments. The IRS allows you to recalculate each quarter. For example, if you had a slow first quarter but a busy summer, you can increase your September and January payments to catch up.
If you find you’ve underpaid, you can make an additional payment at any time to reduce penalties. Conversely, if you overpaid, you’ll get a refund when you file your annual return.
Step 6: Track Payments and Keep Records
Keep a spreadsheet or use accounting software to track each payment, including the date, amount, and confirmation number. You’ll need this information when you file your annual tax return (Form 1040, Schedule C, and Schedule SE). Save all receipts for business expenses as well, since they reduce your taxable income.
Common Mistakes to Avoid
- Forgetting to pay quarterly: The IRS charges a penalty for underpayment, currently around 5% per year on the amount owed.
- Using gross income instead of net: You only pay taxes on profit, not revenue. Deduct your expenses first.
- Ignoring state taxes: Many states also require quarterly estimated payments. Check with your state’s department of revenue.
- Not setting aside money: Open a separate savings account for taxes and transfer a percentage of each payment you receive.
FAQ
Q: What happens if I miss a quarterly payment? A: You’ll likely face an underpayment penalty, which is calculated based on the amount you owe and how long it’s overdue. The penalty is roughly 5% per year, but it can be higher. You can minimize it by paying as soon as possible.
Q: Can I pay my estimated taxes with a credit card? A: Yes, but the IRS charges a processing fee of about 1.85% to 2.9% of the payment amount. It’s usually better to pay by bank transfer to avoid the fee.
Q: Do I need to file quarterly if I expect to owe less than $1,000? A: No. If your total tax liability after withholding and credits is less than $1,000, you don’t need to make estimated payments. However, most midwifery practices will exceed that threshold.
Q: Should I hire a CPA to handle my estimated taxes? A: If you’re comfortable with numbers, you can do it yourself. But a CPA who works with healthcare providers can help you maximize deductions and avoid costly mistakes, especially as your practice grows.
The Bottom Line
Filing quarterly estimated taxes is a non-negotiable part of running a new midwifery practice. Start by projecting your income, calculate your tax using Form 1040-ES, and pay on time via IRS Direct Pay. Set aside 25% to 35% of your net income in a separate account, and review your estimates each quarter. If you stay organized and proactive, you’ll avoid penalties and keep your practice financially healthy. When in doubt, consult a tax professional who understands the unique needs of healthcare practices.