Estimated taxes for Oregon contractors: the January 15 payment and a set-aside plan

General education only, not legal, tax or financial advice. This page summarizes public IRS and Oregon agency information as of October 20, 2026. Rules, thresholds and fees change, so confirm with the linked official source, the CCB, your tax professional or your local building department before you act. Follow local codes, get required permits, and use licensed pros for regulated work.

When you work for yourself, nobody withholds tax from your draws. The IRS and Oregon expect you to pay during the year anyway, through quarterly estimated payments. Contractors get caught by this more than most, because income arrives in big uneven chunks and the money that should go to taxes looks a lot like money for the next materials order.

AI-generated image: a laptop showing a spreadsheet beside a calculator and tape measure — AI-generated image

Who has to pay estimated tax

The IRS's estimated taxes page says individuals, including sole proprietors, partners and S corporation shareholders, generally have to make estimated payments if they expect to owe tax of $1,000 or more when they file. It also says estimated tax covers not just income tax but other taxes such as self-employment tax. If you are in business for yourself, the IRS says, you generally need to make them.

Oregon has its own rule. The Department of Revenue's 2026 Publication OR-ESTIMATE says you must make Oregon estimated payments if you expect to owe $1,000 or more after all credits and withholding, and that underpayment interest may apply if you do not.

The due dates for 2026

The IRS splits the year into four payment periods that are not equal quarters:

January 1 to March 31: due April 15
April 1 to May 31: due June 15
June 1 to August 31: due September 15
September 1 to December 31: due January 15 of the following year

Oregon's 2026 publication lists the same dates: April 15, June 15 and September 15, 2026, and January 15, 2027. Both agencies move a due date that falls on a weekend or holiday to the next business day. January 15, 2027 is a Friday. The IRS also warns that you may owe a penalty for a late or short payment even if you end up due a refund.

What to do between now and January 15

Total your profit so far this year: money in from jobs minus business costs, from your actual records.
List the estimated payments you have already made to the IRS and to Oregon this year.
Ask your tax professional to estimate the January 15 payments based on those numbers and what you expect for November and December. The IRS's Form 1040-ES worksheet and Oregon's publication show the calculation if you do it yourself.
Put both payments in your cash flow forecast for the week of January 15, next to everything else that lands in January.

The IRS says the penalty can generally be avoided by paying enough through withholding and estimated payments, based on this year's tax or last year's, with special rules for higher-income taxpayers. Publication 505 explains the details; your preparer can tell you which applies.

A set-aside habit that fits lumpy income

A deposit lands, then nothing for three weeks, then a big progress payment. Trying to "save for taxes" from whatever is left at the end of the quarter does not work with that pattern. What does:

Open a separate account for taxes and move a fixed share of every customer payment into it the day it clears. Ask your preparer what share to use; it depends on your profit and situation.
Pay from that account only. It is not an emergency fund or a materials account.
Pay more often if it helps. The IRS says you can pay weekly, every two weeks or monthly, as long as enough has been paid by the end of each period.
Ask about the annualized method if your year is very seasonal. The IRS says taxpayers with uneven income may be able to lower or avoid a penalty by annualizing income and making unequal payments, using Form 2210.

How to pay

The IRS lists paying through your IRS online account, Direct Pay, the Electronic Federal Tax Payment System, by phone or the IRS app, or by mail with Form 1040-ES. Oregon payments can be made through the DOR's online options or by mail as described in its publication. Keep confirmations with your tax records.

Build taxes into your prices

If estimated payments always feel like a surprise, the issue may be pricing rather than saving. Taxes come out of profit, so a bid with too little margin leaves too little to set aside. Our guides to pricing a remodel bid and the bid calculator help you check that overhead and profit are actually in the number.

Year-end has more deadlines than this one. If you paid subs, see 1099-NEC for Oregon contractors, and work through the year-end checklist.

Tools Freelancer & Self-Employed Money System ($17)

Log income and expenses as they happen; the workbook fills in monthly profit and a tax set-aside amount, and its Quarterly Tax tab shows how much to set aside for each period next to the usual due dates, with paid vs needed. You choose the set-aside rate. Excel and Google Sheets. An organizing tool, not tax advice.

See it on Gumroad Our own product. We may earn from sales.

Tools 13-Week Cash Flow Forecast ($12)

Put the January 15 payments in the right week next to draws, payroll, subs and renewals. Weekly money in and out, a running balance and weeks below your minimum cash turning red. Excel / Google Sheets.