Estimated Taxes for Business Owners: 2026 Dates and Safe Harbors

Updated September 7, 2026 for the 2026 tax year. Federal figures are from IRS Form 1040-ES, Publication 505 and the corporate instructions; California figures are from the Franchise Tax Board. Other states set their own schedules and thresholds; check yours.

The short answer: the U.S. tax system is pay-as-you-go, and business owners without enough withholding are expected to pay in four installments during the year. For 2026 the federal due dates are April 15, June 15 and September 15, 2026, and January 15, 2027. You avoid the underpayment penalty if your payments during the year cover at least 90% of this year’s tax or 100% of last year’s (110% if last year’s adjusted gross income was above $150,000). How you pay depends on how your business is taxed: a Schedule C owner or partner pays personal estimates on the business profit; an S corporation shareholder can cover most of it through payroll withholding on their salary; a C corporation pays its own corporate estimates on Form 1120 income. Here is the schedule, the safe harbors, and what changes for each entity type.

Who has to pay estimated tax

Individuals generally must make estimated payments if they expect to owe $1,000 or more when they file, after subtracting withholding and credits, and their withholding and credits will be less than the smaller of 90% of the current year’s tax or 100% of the prior year’s tax (110% for higher earners). Corporations must make estimated payments if they expect to owe $500 or more. Estimated tax covers income tax and self-employment tax, plus the net investment income tax and additional Medicare tax where they apply.

The penalty for underpaying is not a flat fine; it is interest on the shortfall for each installment period, computed on Form 2210 (individuals) or Form 2220 (corporations) at the IRS underpayment rate, which is 7% for the fourth quarter of 2026. It is charged even if you pay everything in full when you file, because the payments were late relative to the schedule.

The 2026 federal schedule

Two features of the schedule trip people up. The periods are not equal quarters: the second installment covers only two months and the fourth covers four. And an individual can skip the January 15 payment by filing the 2026 return and paying the full balance by February 1, 2027. Farmers and fishermen have their own rule (one payment by January 15, or none if the return is filed and paid by March 1). If a due date falls on a weekend or holiday, it moves to the next business day.

The safe harbors: how much is enough

You have no penalty for 2026 if your timely payments (withholding plus estimates) equal at least the smaller of:

• 90% of your 2026 tax, which requires projecting the year; or
• 100% of your 2025 tax as shown on last year’s return, or 110% if your 2025 adjusted gross income was more than $150,000 ($75,000 if married filing separately).

The prior-year safe harbor is the practical choice for most owners because it is a known number: take last year’s total tax, apply the 100% or 110% factor, subtract expected withholding, and pay a quarter of the rest each installment. It works even if this year’s income turns out to be much higher; you will owe the difference in April, but with no penalty. Its weakness is the reverse case: if last year was a big year and this year is not, paying 110% of last year’s tax ties up cash you do not need to send, and the current-year method is better.

There is also no penalty if you owe less than $1,000 at filing, or if you had no tax liability last year and were a U.S. citizen or resident for the whole year.

By entity type

Sole proprietors and single-member LLC owners (Schedule C)

The business profit lands on your personal return, so estimated tax is personal: Form 1040-ES payments under your own Social Security number, covering both income tax and the 15.3% self-employment tax on net earnings (12.4% Social Security up to the wage base, plus 2.9% Medicare on all of it). A rough working figure for an owner with no other income is 25% to 35% of net profit set aside each quarter, but the real number depends on your bracket, your spouse’s withholding and your deductions, and the safe-harbor method is more reliable than a percentage. If you also have a W-2 job, you can increase withholding there instead of making separate payments.

Partners and multi-member LLC members (Form 1065 / K-1)

The partnership itself pays no federal income tax and makes no federal estimated payments. Each partner pays personal estimates on their share of the partnership’s income, whether or not the income was distributed, plus self-employment tax on their share of trade or business income and on guaranteed payments. The difficulty is that the K-1 arrives after the year ends, so partners estimate from the partnership’s interim financials, which is one reason a partnership with current books is easier to own. Some states let or require the partnership to pay tax on behalf of nonresident partners or to elect a pass-through entity tax, which changes the personal payment but not the federal one.

S corporation shareholders (Form 1120-S / K-1)

An S corporation ordinarily makes no federal estimated payments on its ordinary income; the only entity-level estimates are for the built-in gains tax, the excess passive income tax or certain investment credit recapture, and only when those total $500 or more. Shareholders pay tax on their share of the profit personally. What makes S corporations different is that the shareholder-employee draws a salary, and withholding on that salary counts toward the shareholder’s estimated tax. Withholding is treated as paid evenly through the year regardless of when it was actually withheld, so a shareholder who under-withheld through October can increase withholding on the November and December payroll and cure the whole year’s shortfall without penalty; an estimated payment made in December does not get that treatment. Many S corporation owners therefore skip Form 1040-ES entirely and run all of their tax through payroll, sized in the fourth quarter once the year’s profit is clear. The salary still has to be reasonable for the work done; the withholding strategy does not change that requirement.

C corporations (Form 1120)

A C corporation pays its own estimated tax in four installments on the 15th day of the 4th, 6th, 9th and 12th months of its tax year, so a calendar-year corporation pays April 15, June 15, September 15 and December 15, 2026, by electronic funds transfer through EFTPS. The corporation must pay 100% of the current year’s expected tax to avoid a penalty; a corporation that is not a “large corporation” (taxable income under $1 million in each of the three prior years) may instead base installments on 100% of the prior year’s tax, provided that return showed a positive tax. The 21% flat rate makes the projection easier than the individual side. The IRS retired the Form 1120-W worksheet; the computation is now in the Form 1120 instructions and the penalty in Form 2220. Dividends the owners take are then taxed personally, and an owner receiving dividends may need personal estimates on those.

Withholding versus estimates

Both count toward the safe harbor, but they are treated differently in timing. Estimated payments count when made, and each installment period is tested separately. Withholding is presumed to be spread evenly across the year unless you elect otherwise, whatever date it was actually withheld. That is why increasing withholding late in the year, whether on an S corporation salary, a spouse’s W-2 or a retirement distribution, can erase an underpayment that an estimated payment on the same day would not. Owners with a W-2 somewhere in the household should use it before writing quarterly checks.

Uneven income: the annualized method

If most of the year’s income comes late (a seasonal business, a large contract in the fall, a property sale in December), paying four equal installments overpays early in the year, and paying nothing until the income arrives triggers a penalty for the earlier periods. The annualized income installment method on Schedule AI of Form 2210 fixes this: you compute each installment from the income actually earned through that period, so a business that earned little by May 31 owes little by June 15. It requires books that can produce year-to-date figures at March 31, May 31 and August 31, and it has to be attached to the return to claim it. This is the case where monthly bookkeeping pays for itself in a single quarter.

California: how the state schedule differs

California follows the federal framework with three differences that catch owners every year.

• The installments are not equal. California requires 30% of the year’s estimated tax on April 15, 40% on June 15, nothing on September 15 and 30% on January 15. Sending four equal payments leaves the first two short and produces a penalty even when the annual total is right.
• The thresholds are different. Individuals must pay estimates if they expect to owe $500 or more ($250 married filing separately). The prior-year safe harbor rises to 110% when California AGI is above $150,000 ($75,000 married filing separately), and taxpayers with AGI of $1 million or more ($500,000 married filing separately) cannot use the prior-year method at all; they must pay 90% of the current year’s tax.
• Payments over a threshold must be electronic. Once an individual makes an estimated payment above $20,000, or files a return with tax above $80,000, all future payments must be made electronically or a 1% penalty applies.

The California underpayment penalty is computed on Form 5805, and the annualized method is available there too. Individual estimates go on Form 540-ES.

Entities have their own California schedule:

• Corporations and S corporations pay estimates on Form 100-ES with the same 30/40/0/30 pattern, and the first installment must be at least the $800 minimum franchise tax. S corporations owe California’s 1.5% tax on net income (with the $800 minimum), which is why California S corporations make entity-level estimates even though they make none federally.
• LLCs taxed as partnerships or disregarded entities pay the $800 annual tax on Form 3522 by the 15th day of the fourth month (April 15 for calendar-year LLCs), and an estimate of the gross-receipts LLC fee on Form 3536 by the 15th day of the sixth month (June 15) if their receipts will reach $250,000; the fee ranges from $900 to $11,790 depending on receipts.
• Partnerships that are not LLCs make no California estimates; the partners do.

Other states

Most states with an income tax use the federal dates and a similar safe harbor, but thresholds, percentages and the treatment of pass-through entities vary. A growing number of states offer or require a pass-through entity tax that the partnership or S corporation pays and the owners credit, which shifts some of the estimated payment burden to the entity. If you operate or live in more than one state, each state’s estimate is separate; our guide to filing in two states covers how income is split.

A working routine for owners

1. In January, take last year’s total tax, apply the 100% or 110% factor (and California’s own factor), and subtract expected withholding. That is the safe-harbor amount.
2. Split it by the federal quarters and California’s 30/40/0/30, and put the dates on the calendar.
3. Each quarter, compare the year-to-date profit from your books to the plan. If income is running far above last year, decide whether to top up now or accept a balance due in April; if it is running below, switch to the current-year or annualized method.
4. S corporation owners: review in October and adjust fourth-quarter withholding rather than sending a separate payment.
5. Keep a record of every payment with the date and confirmation number; the IRS and FTB both misapply payments occasionally, and the confirmation is what fixes it.

Common questions

What happens if I miss an estimated tax payment?

You owe interest-style penalty on the shortfall from the due date until it is paid or until the return due date, computed on Form 2210. Paying as soon as you can limits it; there is no separate late fee. Waivers are available for casualty, disaster or retirement or disability in limited cases.

Can I pay all of my estimated tax in one payment?

You can pay it all with the first installment. Paying it all with the last installment does not avoid the penalty for the earlier periods unless the annualized method shows the income was earned late.

Do I have to pay estimates in my first year of business?

If you had no tax liability last year and were a U.S. citizen or resident all year, you have no federal penalty for this year regardless of what you pay. It is still wise to set money aside, because the whole year’s tax comes due in April.

Does my S corporation need to pay estimated tax?

Federally, only for a few entity-level taxes that most small S corporations do not owe. In California, yes: the 1.5% tax with the $800 minimum is paid in estimates on Form 100-ES.

Where do I pay?

Federal individual payments through IRS Direct Pay, your IRS online account or EFTPS; corporate payments through EFTPS; California through the FTB’s Web Pay. Paper vouchers still exist but are slower to post and harder to trace.

We calculate estimates for business clients as part of business tax preparation and keep them current through the year for clients on a monthly bookkeeping plan. The entity-specific pages cover the rest: S corporation, partnership and LLC tax preparation, and our business tax checklist lists the payment records to keep. Get Started if you want the safe-harbor number worked out for you.

Sources

• IRS, Estimated taxes — irs.gov
• IRS, Form 1040-ES, Estimated Tax for Individuals (2026) — irs.gov
• IRS, Publication 505, Tax Withholding and Estimated Tax — irs.gov
• IRS, Instructions for Form 2210 (annualized income installment method) — irs.gov
• IRS, Instructions for Form 1120 (estimated tax payments) — irs.gov
• IRS, Instructions for Form 1120-S (estimated tax) — irs.gov
• IRS, Instructions for Form 2220 — irs.gov
• IRS, Interest rates remain the same for the fourth quarter of 2026 — irs.gov
• California FTB, Estimated tax payments (individuals) — ftb.ca.gov
• California FTB, Form 540-ES instructions (2026) — ftb.ca.gov
• California FTB, Form 100-ES instructions (2026) — ftb.ca.gov
• California FTB, Limited liability company (annual tax and fee) — ftb.ca.gov
• California FTB, Mandatory e-pay for individuals — ftb.ca.gov