You do not have to predict what you will earn this year. That is the part people get wrong, and it costs them a great deal of anxiety in January. The IRS gives you a second door: pay 100% of what you owed LAST year, in four instalments, and you owe no underpayment penalty however much you end up making. 110% if last year's income was over $150,000. That figure is not a forecast. It is on the return you already filed.More
This is called the prior-year safe harbor and it is written into Form 1040-ES, which is the IRS's own instruction sheet for the payments. There are two tests, and you have to clear either one, not both: pay 90% of what you will owe THIS year, or pay 100% of what you owed LAST year, whichever you prefer. The first test asks you to forecast income you have no way of forecasting. The second asks you to look up a number you already have. So you can have an extraordinary year, hand the IRS a very large cheque the following April, and owe absolutely no penalty, as long as the four instalments cleared the prior-year bar. You still owe the tax, and you should be setting money aside for it. But the PENALTY is a separate question with a much easier answer, and knowing that is the difference between planning your year and dreading it. Put both numbers in below and the page will show you the two doors, tell you which is lower, and split it into four.
What each quarterly payment has to be
$2,250
Door 1: 100% of last year's tax, or 110% if last year's income was over the trigger$9,000
Door 2: 90% of what you expect to owe this year$12,600
You have to clear one of the two doors, not both. Pay 90% of what you owe this year,
or pay 100% of what you owed last year, and either one protects you from the underpayment penalty. The second one
requires no forecast at all: the number is on the return you already filed. If last year's income was over $150,000
it becomes 110%, and if you file married-separately that trigger is $75,000.More
A great year does not have to mean a penalty. If you pay the safe-harbor amount in four
instalments and then earn far more than you planned, you will owe the difference in April, and you will owe no
penalty on it. You still owe the TAX. Set the money aside, because the IRS wants it and there is no safe harbor from
arithmetic. But the penalty is a separate question with a much easier answer, and the two get run together everywhere
you look.
The fourth payment is due in JANUARY, not December. The 2026 dates are 15 April, 15 June and
15 September 2026, and then 15 January 2027. The last one falls in the next calendar year, it arrives in the middle
of everything else, and it is the one people miss.
And under $1,000 of expected tax, you need not pay estimates at all. That is the IRS's own
threshold, on Form 1040-ES. Below it there is nothing to do.
One thing this page does not know: whether anything is being withheld on your behalf, from a job or
a spouse's job. Withholding counts toward these tests, and it counts as though it were spread evenly across the year
even if it all happened in December. If a W-2 is in the picture, the amount you need to send in yourself is lower
than what this page shows, possibly a great deal lower.
§ 02 Your two doors, and the lower one
Door 1: the prior-year safe harbor$9,000
Door 2: 90% of this year's expected tax$12,600
What you must pay across the year to be safe$9,000
Still owed in April, with no penalty on it$5,000
Every figure on this page comes from IRS Form 1040-ES for 2026. It is the rule as the IRS publishes it, applied to the two numbers you typed. It is federal only, and it computes the smallest penalty-safe payment rather than the tax you will owe.
Recommended next steps
The safe-harbor payments protect you from the penalty, and there will still be tax to settle when you file. Set that money aside now rather than in April: the safe harbor protects you from the fine, not from the arithmetic. But you are not doing anything wrong, and you are not being fined.
Pay 100% of last year's tax and you are safe, however much you make this year. 110% if last year's income was over $150,000.More
This is the prior-year safe harbor, and it is on Form 1040-ES. It asks nothing of you except a number you already have. The alternative test asks you to forecast this year's income, which for a freelancer in January is close to a guess. You must clear one of the two, not both, so you may take the easier one deliberately and with the IRS's blessing.
You can owe a big cheque in April and owe no penalty on it. Those are two different things.More
The penalty is for UNDERPAYING the instalments, not for owing tax at filing. If your four payments cleared a safe harbor, the penalty is zero regardless of the final bill. You still owe the tax, and you should have the money. But the dread that a large April bill automatically means a fine is simply mistaken, and it makes people over-pay all year to insure against a risk they were never carrying.
The fourth payment is due 15 January 2027, not in December.More
The 2026 dates are 15 April, 15 June, 15 September, and then 15 January of the following year. Three of them are in the tax year and the fourth is not. It lands in the middle of the new year, when nobody is thinking about the old one, and it is the payment people miss.
Below $1,000 of expected tax, you do not have to make estimated payments at all.More
The IRS's threshold, on Form 1040-ES. If you expect to owe less than $1,000 after withholding and credits, there is nothing to send in and no penalty to avoid.
Withholding counts, and it counts as if it were spread evenly across the year.More
If you have a job, or a spouse who does, the tax withheld from that pay counts toward these tests. And unlike an estimated payment, which is credited when you make it, withholding is treated as though a quarter of it happened in each quarter, even if it was all withheld in December. That is a genuinely useful quirk: a late-year withholding increase can repair an under-payment earlier in the year in a way that a late estimated payment cannot.
This is a federal calculation, and we have not read your state's rules.More
If your state taxes income, it will have its own estimated-payment regime, with its own thresholds, its own safe harbors and possibly its own due dates. We did not check them, so this page says nothing about them. What it can tell you is that a federal safe harbor does nothing for a state penalty: they are separate systems with separate fines, and clearing one does not clear the other.
Everything on this page is statutory. The 90% test, the 100% prior-year test, the
110% variant, the $150,000 trigger ($75,000 married-separately), the $1,000 threshold and the four due dates all come
from IRS Form 1040-ES for 2026. Ours: nothing. There is no model here, no estimate of ours, and no
average. It is the rule, applied to the two numbers you typed.More
What this page is, and what it is not. It is a PENALTY calculator: it tells you the smallest
amount you can pay across four instalments and still be safe from the underpayment penalty. It is NOT a calculator of
what you will owe. That figure is the one you type into the last box, and if you want help arriving at it, the
self-employment tax calculator on this site does that job with the same IRS sources.
Federal only. If your state taxes income, it will have its own estimated-payment rules, with its own
thresholds, its own safe harbors and possibly its own dates. We have not read them, this page does not touch them,
and a federal safe harbor will not protect you from a state penalty. Check your state separately.
The annualised-income method exists too, and it is not here. If your income is wildly seasonal, the
IRS lets you compute each instalment against what you actually earned in that part of the year, on Schedule AI of
Form 2210. It can cut the early payments substantially. It is also genuinely fiddly, and it is beyond what a page like
this can do responsibly. If your year is shaped like that, it is worth an hour with the form or twenty minutes with an
accountant.
Where every number above comes from
IRS
IRS, Form 1040-ES (2026), Estimated Tax for Individuals. The 90% current-year test, the 100% prior-year safe harbor, the 110% variant where prior-year AGI exceeded $150,000 ($75,000 married filing separately), the $1,000 threshold below which estimated payments are not required, and the four payment due dates: 15 April 2026, 15 June 2026, 15 September 2026 and 15 January 2027
IRS, Revenue Procedure 2025-32. The 2026 inflation-adjusted figures, used here for the standard deduction and bracket context behind an expected-tax estimate
Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.
This computes the PENALTY-safe payment, not the tax you will owe.
Those are different questions. This page tells you the smallest amount you can pay across four instalments and still be safe. What you actually owe is the figure you typed into the last box, and the self-employment tax calculator on this site will help you arrive at it.
It assumes nothing is being withheld for you.
If you or a spouse have a W-2 job, that withholding counts toward these tests, and the amount you have to send in yourself is lower than the figure here. It also counts as if spread evenly across the year, which is a useful quirk if you are catching up.
Federal only. Your state is a separate calculation with separate penalties.
If your state taxes income it will run its own estimated regime. We have not read it. A federal safe harbor does not protect you from a state one.
The prior-year figure must be last year's TOTAL tax, not the balance you paid in April.
The balance is what was left after withholding and payments already made. The safe harbor is measured against the total. Using the balance will understate the bar, sometimes by a lot, and the penalty it is protecting you from is real.
The annualised-income method is not here, and for a seasonal year it can beat both doors.
Schedule AI of Form 2210 lets you match each instalment to what you actually earned in that part of the year. It is fiddly, it is beyond this page, and if your income arrives in one lump it is worth the hour.
Frequently asked questions
How much estimated tax do I actually have to pay?
The lower of two numbers, because you have to clear one test and not both. Test one is 90% of what you will owe this year, which requires you to forecast your income. Test two is 100% of what you owed last year, which requires nothing but the return you already filed, and it rises to 110% if last year's income was over $150,000. Whichever is lower, divide it by four, and pay it on 15 April, 15 June, 15 September and 15 January. That is the whole rule, and it is on IRS Form 1040-ES.
What is the safe harbor and why does it matter so much?
It is the prior-year test, and it matters because it takes the forecasting out of the problem. If you pay 100% of last year's total tax across your four instalments, you owe no underpayment penalty this year no matter how well the year goes. 110% if last year's income was over $150,000, or $75,000 if you file married-separately. So a freelancer whose income swings wildly does not have to guess: they can pay against a number they already know, and any extra tax simply gets settled in April with no penalty attached.
If I owe a lot in April, do I get fined?
Not if your instalments cleared a safe harbor. The penalty is for underpaying the instalments, not for owing tax at filing time. Those two things are run together almost everywhere and they are genuinely different. You still owe the tax, and you should have set the money aside, but a big April bill with a cleared safe harbor behind it carries no penalty at all. This is the single reason to read the rule rather than follow the folk advice.
When are the 2026 estimated tax payments due?
15 April 2026, 15 June 2026, 15 September 2026, and 15 January 2027. Note the last one: it falls in the following calendar year, in the middle of a month when nobody is thinking about last year's taxes, and it is the payment people miss. Note also that the quarters are not equal lengths, which surprises people the first time they look at the dates properly.
Do I have to pay estimated tax at all?
If you expect to owe less than $1,000 after withholding and credits, no. That is the IRS's own threshold on Form 1040-ES, and below it there is nothing to send and nothing to avoid. Also worth knowing: if you have a job, or a spouse with one, you can often solve the whole problem by increasing the withholding on that pay instead of making estimated payments, because withholding is treated as though it were spread evenly across the year.
