Nothing stops you from writing one check at the end of the year instead of four throughout the year. The IRS will accept the money. But they’ll also charge you an underpayment penalty for each quarter where you fell short, and that penalty adds up.

The IRS sets four quarterly due dates: April 15, June 15, September 15, and January 15 of the following year. You’re expected to pay roughly one-fourth of your annual tax liability by each deadline. When you skip a quarter, the penalty acts like interest on the amount you should have paid, running from that quarter’s due date until you actually pay. The current penalty rate is tied to the federal short-term rate plus 3%, which has been running around 7% to 8% in recent years.

There are safe harbor rules that can protect you from the penalty even if you don’t nail the exact amount each quarter. If you pay at least 100% of last year’s total tax liability spread across the four quarters, you’re safe regardless of what you owe this year. If your adjusted gross income was over $150,000 last year, that threshold bumps to 110%. Alternatively, paying 90% of this year’s actual liability across the quarters also keeps you penalty-free.

For trade and construction business owners with uneven income, the quarterly requirement can feel frustrating. You might make most of your money between May and October and very little in winter. The IRS offers an annualized income installment method that lets you base each quarter’s payment on actual income earned during that period rather than dividing the year evenly. It requires more calculation but can reduce or eliminate underpayment penalties when your income is genuinely seasonal.

The real cost of skipping quarterly payments goes beyond the penalty itself. Business owners who wait until year-end often face a much larger bill than expected because they haven’t been setting money aside. A $20,000 tax bill in April is a lot harder to absorb than four $5,000 payments spread across the year. This is one of the areas where working with a CPA for trade businesses makes a meaningful difference. Having someone help you estimate each quarter’s payment keeps you from falling behind.

If you’re not sure what your quarterly amounts should be, start with last year’s total tax bill divided by four. That’s a simple way to meet the safe harbor threshold. As the year progresses and you have a better picture of your income, your accountant can adjust the remaining payments up or down.

Skipping quarterly payments to save yourself the hassle isn’t worth it. The penalty is avoidable, and the discipline of paying throughout the year makes your tax planning significantly easier. Set calendar reminders for the four due dates, estimate conservatively, and pay on time. You’ll thank yourself in April.