When you work for a company, your employer withholds taxes from every paycheck and sends them to the IRS for you. But if you drive for an app, clean houses, take construction jobs as a contractor, sell online or run your own business, no one is withholding anything. The U.S. tax system is pay-as-you-go, not a once-a-year bill in April, and that is what estimated tax payments, figured with Form 1040-ES, are for.
A lot of people only find out about this when they sit down to file and see a large balance due plus a penalty. The good news: there is still time for the 2026 tax year. The fourth and final payment is due Friday, January 15, 2027. This guide walks you through how it works, how much to pay and your payment options.
Who has to make estimated payments?
According to the IRS, in most cases you must pay estimated tax for 2026 when both of these are true:
- You expect to owe at least $1,000 in federal tax for 2026 after subtracting withholding and refundable credits.
- Your withholding plus refundable credits will be less than the "safe harbor" amount explained below.
This mostly affects freelancers and contractors paid on a 1099, single-member LLC owners, partners (partnerships don't withhold for their partners) and anyone with rental, investment or retirement income that has little or no withholding. Keep in mind that on top of income tax, self-employed people owe self-employment tax (Social Security and Medicare) at 15.3% once net earnings reach $400. That is why the balance can grow faster than you expect.
The safe harbor rule: 90%, 100% or 110%
The IRS doesn't expect you to guess your exact tax. You avoid the underpayment penalty if your withholding and estimated payments, made on time, cover the smaller of:
- 90% of the tax on your 2026 return, or
- 100% of the tax on your 2025 return (which must cover a full 12 months).
If your 2025 adjusted gross income (AGI) was over $150,000 ($75,000 if married filing separately), the second figure becomes 110%. Farmers and fishers get special treatment: if at least two-thirds of their gross income comes from farming or fishing, they can make a single payment by January 15, 2027, or file and pay in full by March 1, 2027.
Due dates for the 2026 tax year
| Payment | Income earned | Due date |
|---|---|---|
| 1st | Jan. 1 – Mar. 31 | April 15, 2026 |
| 2nd | Apr. 1 – May 31 | June 15, 2026 |
| 3rd | June 1 – Aug. 31 | September 15, 2026 |
| 4th (up next) | Sept. 1 – Dec. 31 | January 15, 2027 |
January 15, 2027 is a Friday, so the date doesn't shift. When a due date lands on a Saturday, Sunday or legal holiday, a payment made the next business day counts as on time. One handy exception from the 2026 Form 1040-ES instructions: you can skip the January payment if you file your 2026 return by February 1, 2027 and pay the full balance with it.
How to pay
The IRS encourages electronic payments. Your main options:
- IRS Direct Pay: a free transfer from your checking or savings account, no sign-up needed. Choose "Estimated Tax" and tax year 2026, and save your confirmation number.
- Your IRS online account: lets you pay and see every payment you've already made, which is very handy at filing time. Identity verification is required.
- EFTPS: still the system for business payments such as payroll taxes. For individuals, however, EFTPS.gov stopped taking new enrollments in October 2025 and says individuals will have to move to other methods during 2026. If you use it for personal payments, plan to switch to Direct Pay or your online account.
- Debit or credit card: through the approved processors listed at IRS.gov/Payments; they charge a fee.
- Check or money order: payable to "United States Treasury," mailed with the 1040-ES voucher. Write "2026 Form 1040-ES" and your SSN or ITIN on it. This is the slowest option.
ITIN holders can make estimated payments too: just use your ITIN wherever a Social Security number is requested. Need to apply for or renew an ITIN? See our financial services.
The underpayment penalty (Form 2210)
If you paid too little or too late, the IRS may charge a penalty when you file, even if you end up getting a refund. It works like interest, applied to each missed amount for the days it went unpaid. For the fourth quarter of 2026 the rate is 7% per year, compounded daily, and the IRS resets it every quarter.
Form 2210 is used to figure the penalty or show that you don't owe it. If your income came in unevenly (say, most of it in November and December), the annualized income method on Schedule AI may lower it. The penalty can also be waived in certain situations, such as disasters or some retirement and disability circumstances; the Form 2210 instructions explain who qualifies.
Tips for gig workers and small business owners
- Set aside a percentage of every payout. Open a savings account just for taxes and move a fixed share of each payment into it, so the quarterly bill is never a surprise.
- Report all of your income. Platforms only have to send a Form 1099-K above $20,000 and 200 transactions, but the income is taxable whether or not you get a form.
- Track your expenses. Business mileage, phone, tools and supplies can lower your net profit, and with it your estimated payments. Keep receipts and a mileage log.
- Recalculate when income changes. If you earned much more (or less) this year than last, adjust your January payment using the 1040-ES worksheet.
- Florida has no state personal income tax, so most Florida residents only need to worry about federal payments. If you live in another state, check its own deadlines.
Frequently asked questions
Can I pay everything at once instead of four payments?
Yes. You can pay your whole estimated tax by the first due date, or make more than four payments. What matters is that by each deadline you've paid at least what was required for that period.
I started working for myself this year. What now?
If your self-employment income started after March, the IRS lets you begin paying from the period when that income arose, using the annualized method. If you haven't made any 2026 payments yet, the January 15, 2027 payment is your chance to catch up.
How much should I pay in January?
It depends on your income, expenses and what you've already paid. As a general guide, compare 90% of your projected 2026 tax with 100% (or 110%) of your 2025 tax, subtract what you've already paid and had withheld, and pay the difference. We can run the numbers with you.
What if I can't pay the full amount?
Pay what you can before the deadline: every dollar paid on time reduces the penalty. If you can't cover the balance when you file, the IRS offers online payment plans (a setup fee applies).
Do LLCs pay estimated taxes?
A single-member LLC usually doesn't pay on its own: the owner makes estimated payments personally with Form 1040-ES. Corporations follow their own rules and forms.
Get ready before January 15
At USA FILE Financial we prepare tax returns, calculate your estimated payments from the information you give us and keep your business books in order, so April holds no surprises. If you'd like to go over your numbers before the next payment, contact us and schedule a call with our team.