South Dakota · 1099 quarterly taxes · 2026

1099 Quarterly Taxes in South Dakota (2026)

Written by Vincent Roy

Last reviewed May 22, 2026 · Sourced from IRS Rev. Proc. 2025-32 and state revenue agencies

Estimates only — not personalized tax advice. See disclaimer.

Self-employed taxpayers in South Dakota have one set of taxes to worry about: federal. South Dakota's no personal income tax rule eliminates state filing entirely, leaving only the IRS side — federal income tax + 15.3% SE tax.

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Updated May 2026 · Sources: South Dakota Department of Revenue, IRS Form 1040-ES

Income tax

South Dakota state income tax (2026)

0%. South Dakota is one of nine states without a personal income tax (the others: Alaska, Florida, Nevada, New Hampshire, Tennessee, Texas, Washington, Wyoming). Self-employed South Dakota residents file a federal return (Form 1040 + Schedule C + Schedule SE) but no state income tax return is required for personal 1099 income.

Due dates

Quarterly payments — federal only for South Dakota residents

Federal estimated tax due dates apply nationwide:

  • Q1 — April 15, 2026
  • Q2 — June 15, 2026
  • Q3 — September 15, 2026
  • Q4 — January 15, 2027

Pay through IRS Direct Pay (irs.gov/payments) for free bank transfers, or mail Form 1040-ES with a check.

Penalties

Safe harbor and underpayment penalty (federal only)

Because South Dakota has no state income tax, you only need to worry about the IRS safe-harbor rule: pay either 90% of your current-year federal tax liability or 100% of last year's federal tax (110% if your prior-year AGI was over $150,000), spread across the four quarterly estimated tax due dates. Hit either threshold and you avoid the IRS underpayment penalty assessed on Form 2210.

For freelancers with rising income, paying 100% of last year's tax is usually the simpler play — you know the number with certainty in April. For those whose income is dropping or volatile, the 90%-of-current-year safe harbor protects you better but requires honest mid-year projections.

No state tax

What "no income tax" actually means in South Dakota

South Dakota's no-income-tax status simplifies South Dakota-side filing for self-employed residents but doesn't eliminate tax obligations. Three details matter:

  • Federal still applies in full. Federal income tax brackets, the 15.3% SE tax, the Additional Medicare Tax (0.9% above $200k single / $250k MFJ), and the federal QBI deduction all apply identically to South Dakota residents.
  • Sales tax + property tax fill the gap. States without income tax typically have higher-than-average sales and/or property taxes. South Dakota is no exception. Plan accordingly when budgeting total tax burden — your federal-and-SE bill is only part of the picture.
  • Multi-state work creates complexity. If you live in South Dakota but perform work physically in a state with income tax, you may owe tax to that state on the income earned there. Common scenarios: traveling consultants, remote employees of out-of-state companies, multi-state contractors.
South Dakota-specific quirk

South Dakota-specific quirk freelancers miss

South Dakota has no state personal income tax. There is no tax on interest, dividends, or capital gains either. The state's revenue comes primarily from sales tax (4.2% state) and property taxes.

Common federal filing

Common federal filing mistakes South Dakota freelancers make

Even without a state return, South Dakota self-employed taxpayers consistently make four federal mistakes that cost money or trigger penalties:

  • Forgetting the 15.3% self-employment tax. SE tax is the freelancer's version of FICA — 12.4% Social Security + 2.9% Medicare, applied to 92.35% of net SE earnings. It's separate from federal income tax. Many first-year freelancers budget only for income tax bracket and get hit with an unexpected SE-tax bill.
  • Not separating business and personal finances. Without a separate business bank account, year-end reconciliation becomes a nightmare and audit risk rises. Even sole proprietors benefit from a dedicated checking account.
  • Skipping quarterly estimates entirely. If you owe more than $1,000 in federal tax at year-end and didn't pay quarterly, the IRS assesses an underpayment penalty. Even one quarter of estimates protects you against full-year penalty exposure.
  • Mixing gross receipts with net income. "I made $80,000 this year" usually means gross receipts. Your taxable SE income is gross minus business expenses (Schedule C line 31), and only THAT number is taxed. Track expenses ruthlessly.
Deductions

Common federal deductions for South Dakota freelancers

Without a state return, your only itemization layer is federal. The deductions that matter most:

  • Standard business expenses — software, contractors, supplies, professional services.
  • Home office — simplified ($5/sq ft up to 300 sq ft) or actual percentage of rent/utilities.
  • Mileage — $0.70/mile in 2026 (business use).
  • Half of SE tax — federal above-the-line deduction.
  • QBI deduction — 20% of qualified business income, federal.
  • SEP-IRA / Solo 401(k) — major shelter for high-income freelancers.
  • Self-employed health insurance premiums — fully deductible if no W-2 spouse coverage.
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