Pay the safe amount and skip the estimated tax penalty
You pay your own taxes during the year and want no penalty next April. The safe harbor rule for taxes says you are safe if you pay the smaller of 90% of this year's tax or 100% of last year's. If a penalty already came, a tax pro can check the waiver for you.
- 110%
If last year's AGI was over $150,000, the last-year test is 110%, not 100%.
high earners need a bigger cushion to be safe.
check line 11 of last year's return before you set payments.
- 4 dates
Payments are due April 15, June 15, September 15 and January 15.
one late payment adds a little interest for the days it was late.
put all four dates in your calendar today.
The rule in plain words
Imani, a freelance designer, had $14,000 of tax last year and expects about $18,000 this year. Her safe amount is the smaller of $14,000 and $16,200, which is $14,000.
The IRS estimated tax penalty page lists the tests. You have no penalty if you owe less than $1,000 when you file. You also have none if what you paid during the year reached the smaller of two numbers.
- 90% of the tax on this year's return.
- 100% of the tax on last year's return, or 110% if last year's AGI was over $150,000 ($75,000 if married filing separately).
Which number to use
Last year's number is the one you can know in advance. That is why most people plan around it. It also protects you if your income jumps.
| Imani | Amount |
|---|---|
| 90% of this year's $18,000 | $16,200 |
| 100% of last year's $14,000 | $14,000 |
| Safe amount (the smaller) | $14,000 |
| Each of four payments | $3,500 |
If her AGI last year had been over $150,000, the 110% test would give $15,400. Her four payments would then be $3,850 each.
The four due dates
The IRS splits the year into four uneven periods. The IRS page lists these dates:
| Income earned | Payment due |
|---|---|
| January 1 to March 31 | April 15 |
| April 1 to May 31 | June 15 |
| June 1 to August 31 | September 15 |
| September 1 to December 31 | January 15 of the next year |
How to set it up
- Find last year's total tax on your return.
- Multiply it by 100%, or 110% if your AGI was over $150,000.
- Subtract the tax you expect to have withheld from pay or a pension.
- Divide what is left by four and pay it by each due date.
If you have a job too, the IRS estimated tax FAQ notes that more withholding can do the same job. Check the numbers below, then see the underpayment penalty page if a bill already came.
Starts with an example: $18,000 of tax this year, $14,000 last year, $9,000 paid. Change any box to see yours.
Example
Safe amount to pay during the year: $14,000
You are short by: $5,000
Rough penalty if the shortfall was spread evenly over the year: about $233. Form 2210 gives the exact figure.
Have this checked. If a penalty notice already came, a licensed tax professional can check the waiver rules and Form 2210 against the $5,000 shortfall.
For any other penalty, start at IRS penalty removal.
Frequently asked questions
What is the 110% safe harbor rule?
If last year's AGI was over $150,000, or $75,000 married filing separately, you need to pay 110% of last year's tax to be safe, not 100%.
Does withholding count toward the safe harbor?
Yes. Tax withheld from pay, pensions or Social Security counts along with estimated payments.
Do I still owe tax if I meet the safe harbor?
Yes, if your tax went up. The rule only removes the penalty. You still pay the rest by the April due date.
What if I miss one of the four payments?
The penalty is figured payment by payment, so a late one costs a little interest for the days it was late. Catch up as soon as you can.
Sources
- Underpayment of estimated tax by individuals penalty, irs.gov, checked October 2026.
- Estimated tax FAQ, irs.gov, checked October 2026.
What to do now
Talk it through by phone
You are planning payments, or you already have an estimated tax penalty for last year. A licensed tax professional can check the safe amount against what you paid and ask for a waiver if the charge is wrong. Call now with last year's return and any penalty notice.
A licensed tax professional answers during business hours. The call costs nothing, and you are not signing up for anything. Form 843 Help is a private service, not the IRS, and your details go to one tax professional only.
- You call during business hours and say which penalty and tax year you are looking at.
- A licensed tax professional reads your notice with you and checks first-time removal and reasonable cause.
- You hear the options and the fee for filing before you agree to anything.
Or send the details about your penalty
You would rather write than call about your penalty for . A request that names the wrong rule or misses a year can be turned down, so a licensed tax professional checks it first. Send the tax year and the penalty amount if you have one.