How estimated taxes work
If you earn income that isn't subject to withholding — self-employment, freelance, investment, rental, or gig income — the IRS expects you to pay tax on it as you go, in four quarterly installments, rather than all at once when you file. Pay too little during the year and you can owe an underpayment penalty, even if you settle the full balance by the April deadline.
You avoid the penalty by meeting a safe harbor: prepay (through withholding plus estimated payments) the smaller of 90% of this year's tax or 100% of last year's tax. If your prior-year adjusted gross income was over $150,000 ($75,000 if married filing separately), the prior-year figure rises to 110%. Because last year's tax is a known, fixed number, it's usually the easiest target to hit.
2026 due dates
For tax year 2026 the four installments are due April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027. When a due date lands on a weekend or federal holiday, it shifts to the next business day. The September 15 deadline is the one most people miss — it falls right after summer, and it's the third of four payments.
When there's no penalty
You won't owe a penalty at all if the balance you still owe after withholding is less than $1,000, or if you had no tax liability last year (for a full 12-month year as a U.S. citizen or resident). The penalty itself is charged as interest on each underpaid installment at the federal short-term rate plus 3 percentage points, compounded daily — 7% for the quarter beginning July 1, 2026.
How this calculator works
The tool computes the required annual payment as the smaller of 90% of your expected current-year tax and 100% (or 110% for higher prior-year AGI) of your prior-year tax, per IRC §6654 and the Form 2210 instructions. It subtracts your withholding to find what's still needed, divides by four for the per-quarter figure, and checks the $1,000 / no-prior-liability exceptions. The optional penalty figure is a simplified Form 2210 estimate: it assumes the shortfall is spread equally across the four installments and accrues interest at the 7% annual underpayment rate from each installment's due date to the April 15, 2027 filing deadline. Your actual penalty depends on exactly when each payment is made and can differ; use Form 2210 or a tax professional for the precise amount.