Quarterly Estimated Taxes for the 1099 Dermatologist - Don’t Get Wrecked in April
When you leave a W2 for 1099 locums work, one thing quietly disappears: the invisible machinery that was pulling taxes out of every paycheck. As an employee, you probably noticed it but never had to think too hard about it. Payroll withheld federal, state, Social Security, and Medicare before the money hit your account. As an independent contractor, that machinery is gone, and you are now the payroll department. Nobody withholds anything. The full check lands in your account, and the IRS expects you to send money four times a year, on your own initiative, or pay a penalty for not doing so.
The goal of this guide is to help 1099 dermatologists avoid an unexpectedly huge tax bill in April and the underpayment penalty on top.
Why the IRS wants money four times a year
The U.S. tax system is pay-as-you-go. The government doesn't want to wait until April for a year's worth of taxes; it wants them roughly as you earn. Employees satisfy this automatically through withholding. Everyone else satisfies it through estimated quarterly payments. If you don't pay enough as you go, the IRS charges an underpayment penalty. There are some niche circumstances where the IRS will waive this penalty, but that’s beyond the scope of this post.
What’s the “safe harbor” rule?
You don’t have to perfectly predict your tax bill to avoid the underpayment penalty. You just have to hit one of the safe harbor thresholds. Pay at least the smaller of:
90% of your current year's total tax, or
100% of last year's total tax — importantly, this becomes 110% if your prior-year adjusted gross income was over $150,000.
You can't perfectly forecast this year's income while it's still happening, but last year's return is sitting right in front of you. Take last year's total tax, multiply by 1.1, divide by four, and you have a payment that keeps you penalty-safe regardless of how this year shakes out. If you earn more this year, you'll still owe the difference in April — but you won't owe a penalty, and that's the point of safe harbor.
The four due dates
For whatever reason, these dates are not evenly spaced. For the 2026 tax year:
Q1: April 15, 2026 (covers income from January–March)
Q2: June 15, 2026 (April–May — yes, only two months)
Q3: September 15, 2026 (June–August)
Q4: January 15, 2027 (September–December)
Pay federal through IRS Direct Pay or EFTPS. Don't forget your state — if you're licensed and working in a state with income tax, it usually has its own estimated-payment system and its own due dates. As someone practicing across state lines, this is where locums gets genuinely more complicated than a single-state W2, and it's worth a conversation with a CPA who understands multi-state physician income.
Don't forget self-employment tax
As a W2 employee, you paid half of Social Security and Medicare (7.65%) and your employer paid the other half. As a 1099 contractor, you pay both halves — the full 15.3% self-employment tax — on top of regular income tax.
For 2026:
12.4% for Social Security, but only on net self-employment earnings up to the $184,500 wage base. Above that, the Social Security portion stops.
2.9% for Medicare on all net earnings, no cap.
An additional 0.9% Medicare surtax on earnings above $200,000 (single) or $250,000 (married filing jointly).
One piece of relief: you get to deduct the employer-equivalent half of your SE tax (roughly 7.65%) above the line, which lowers your income for regular tax purposes. It doesn't make the SE tax go away, but it softens it. The bottom line is that your estimated payments need to cover income tax and self-employment tax together. Budgeting only for income tax is exactly how people can end up short.
How much should you set aside?
Practically speaking, I would consider setting aside ~30-40% of every 1099 check as money you don’t spend invest until the payment is due. Consult a trusted CPA for numbers better suited to your situation.
One more thing
If you’ll take one message away from this post, remember that the 1099 money in your account is not all yours. Internalize that early, hit your safe harbor, and April becomes a formality instead of a crisis.
I'm a dermatologist sharing my own experience, not a lawyer, accountant, or financial advisor, and nothing here is legal, tax, financial, or medical advice. Consult a qualified professional about your specific situation.
