Understanding and Managing Estimated Taxes for Esports Pros and Creators

If you’re making money, the IRS wants their cut, long before April 15.

As an esports player or content creator, chances are your income isn’t coming with taxes withheld. Prize checks, Twitch payouts, YouTube revenue, brand deals, they all land in your account untouched. That’s great for cash flow, but it also means the IRS expects you to send in payments on your own throughout the year.

That’s what estimated taxes are all about.

Why It Matters

Most pros and creators learn this lesson the hard way: you can rack up thousands in tax liability before tax season even starts. Skip quarterly payments, and you’ll owe not just the tax itself but also penalties and interest.

The fix is simple: pay in as you go, stay penalty-proof, and never let tax season blindside you.

What Are Estimated Taxes?

Estimated taxes are quarterly payments to cover:

• Federal income tax
• Self-employment tax
• Certain additional taxes if you’re in higher brackets

You owe them on income like:

• Tournament winnings
• Twitch or YouTube revenue
• Brand sponsorships
• Merch, affiliate sales, or coaching gigs

If nobody’s withholding taxes for you, you should assume you’re responsible for estimated payments.

When They’re Due

The IRS doesn’t follow a clean quarterly schedule. Here’s how it actually works:

• Jan 1 – Mar 31 income → due April 15
• Apr 1 – May 31 income → due June 15
• Jun 1 – Aug 31 income → due September 15
• Sep 1 – Dec 31 income → due January 15 (the following year)

Miss one? Penalties start right away.

How to Estimate What You Owe

This depends on where you are in your career:

If you’re new or income varies a lot:

• Set aside 25–30% of everything you make into a separate tax savings account.
• Use that account to make quarterly payments.
• As income grows, refine your numbers with a CPA.

If you’re established and earning consistently:

• Use the “safe harbor” rule: pay 100% of last year’s tax liability (110% if you made over $150K), split into four payments.
• Or calculate based on your actual quarterly income, just make sure your bookkeeping is airtight.

Tools That Make It Easier

• IRS Form 1040-ES for calculations
• Apps like Keeper or QuickBooks Online for tracking
• Payroll platforms like Gusto (if you’re running an S-Corp salary)

Common Pitfalls

• Ignoring estimated taxes altogether
• Waiting until year-end to make a lump sum payment
• Underestimating income during a growth year
• Forgetting about state estimated taxes (especially in high-tax states like CA or NY)

Final Thoughts

Estimated taxes are one of those things that can quietly wreck your year if you don’t stay on top of them. I’ve seen creators win big in a single month, spend it, and then get crushed by an unexpected tax bill they never planned for. I’ve also seen pros pay way more than they needed to just to avoid thinking about it.

Here’s the difference when you work with a CPA who knows your world: you get a system that fits your income patterns, catches the tax breaks you’d miss, and shields you from penalties. Could you track everything yourself with spreadsheets and IRS forms? Sure. But that’s energy you could be putting into content, sponsorships, or your next competition.

My role is to make sure taxes aren’t the thing that slows you down. With the right setup, you’ll know exactly what to send, when to send it, and how to keep more of what you earn. Let’s talk!

About Dark Horse CPAs

Dark Horse CPAs provides an integrated suite of services including tax, accounting, fractional CFO, and wealth management to small businesses and individuals across the U.S. The firm was established to transform the client experience by offering personalized, high-quality services that small businesses and individuals deserve. As Dark Horses in their industries, these businesses benefit from advanced tax strategies and accounting insights typically reserved for larger companies. With a nationwide presence and a team of dedicated professionals, Dark Horse CPAs is committed to your success. Get a quote today.