For business owners who don’t have taxes automatically withheld from a paycheck, the IRS doesn’t wait until April to collect. Estimated taxes are paid in four installments throughout the year, and the next one, covering income earned from June through August, is due September 15, 2026.
Missing this deadline, or underpaying it, is one of the more avoidable ways businesses end up owing penalties on top of the taxes they already owed. Here’s what determines whether you need to pay, how to calculate the right amount, and how to build a system so the deadline never sneaks up on you again.
Who Actually Needs to Pay Quarterly Taxes
Estimated taxes generally apply to anyone who doesn’t have an employer withholding income tax on their behalf. That includes:
- Sole proprietors and single-member LLC owners
- Partners in a partnership and members of a multi-member LLC
- S-corp shareholders who take distributions in addition to salary
- Freelancers and independent contractors
The general threshold: if you expect to owe $1,000 or more in tax for the year after subtracting withholding and credits, the IRS expects estimated payments. W-2 employees with straightforward withholding usually don’t need to worry about this, but anyone with significant 1099 income, rental income, or investment gains alongside a regular job might still owe.
Kurv Tip: If this is your first year in business, base your estimate on projected income rather than waiting until you have a full year of data. A rough estimate paid on time beats a perfect number paid late.
How the Safe Harbor Rule Protects You From Penalties
You don’t have to calculate your tax bill down to the dollar to avoid a penalty. The IRS offers a “safe harbor”: pay enough throughout the year and you won’t be penalized, even if you owe more when you file.
- Pay at least 90% of your current year’s total tax liability, or
- Pay 100% of last year’s total tax liability (110% if last year’s adjusted gross income was above $150,000)
Whichever of those two numbers is smaller is the one you need to hit. This is why many business owners base their quarterly payments on the prior year’s return. It’s a number they already know, which beats forecasting a moving target.
Kurv Tip: Had an unusually high-income year last year? Basing this year’s payments on 110% of that return could mean overpaying every quarter. Run both calculations before deciding which safe harbor to use.
Common Mistakes That Trigger an Underpayment Penalty
A few patterns show up again and again in businesses that get hit with penalties they didn’t expect:
- Paying based on a guess rather than actual income or the safe harbor calculation.
- Forgetting that many states require their own estimated payments on their own deadlines. Texas has no personal income tax, so owners here often assume this doesn’t apply to them. It can, the moment you have income sourced to a state that does have one.
- Assuming a large Q4 payment can make up for underpaying earlier quarters. The IRS calculates penalties quarter by quarter, not on the annual total.
- Not adjusting payments after a strong quarter, so the next installment is based on outdated numbers.
Estimated tax payments are only as accurate as the financial data behind them, which is one of the reasons falling behind on bookkeeping makes quarterly taxes harder to get right.
Kurv Tip: Set a recurring calendar reminder two weeks before each quarterly deadline (April 15, June 15, September 15, and January 15) to review year-to-date income before you calculate the payment.
Building a System So You’re Never Caught Off Guard
The businesses that handle quarterly taxes smoothly usually share a few habits:
- Monthly bookkeeping instead of a once-a-year scramble, so income totals are always current
- A separate savings account where a set percentage of every deposit is automatically moved aside for taxes
- A quarterly check-in, ideally with whoever manages your books, to confirm the payment amount before the deadline
If your books have fallen behind and quarterly numbers feel like a guess, catch-up bookkeeping is usually the fastest way to get back to a place where estimated payments are based on real numbers instead of estimates stacked on estimates.
The Bottom Line
Quarterly estimated taxes aren’t complicated in theory, but they depend on having clean, current financial data to calculate correctly. The September 15 deadline is a good checkpoint to review where your business stands for the rest of the year, not just for this payment, but for year-end tax planning as well.
For a deeper look at reducing what you owe before the year closes, see our post on tax planning strategies that save money before year-end. And if payroll compliance is also on your radar this quarter, our breakdown of payroll red flags covers the other side of staying audit-ready.
Want a second set of eyes on your Q3 numbers before September 15? Our tax services team can confirm your payment amount before you send it. Call (830) 214-2209 or visit kurvbusiness.com.