Not everyone has taxes taken out of their income automatically, and for those who do not, the IRS expects payment in installments through the year. The third of those quarterly estimated payments for 2026 is due September 15. Miss it or come up short, and the government can charge a penalty even if you end up owing nothing, or getting a refund, at tax time. Here is who needs to pay and how to avoid the penalty.
Who owes estimated taxes
Estimated taxes apply to income that does not have tax withheld from it before it reaches you. That covers a lot of people: the self-employed and gig workers, freelancers and independent contractors, landlords, and investors with significant interest, dividends, or capital gains. It can also catch retirees, because the taxable portion of a pension or Social Security benefit, and withdrawals from retirement accounts, may not have enough tax withheld to cover what is owed. The Internal Revenue Service lays out the rules and payment options.
The general trigger is owing at least $1,000 in tax for the year after subtracting withholding and refundable credits. If you expect to be in that position and your income is not being withheld against, you are likely on the hook for quarterly payments, and the September 15 deadline is the third of four for 2026.
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Why a penalty can hit even if you get a refund
This is the part that surprises people most. The estimated-tax penalty is really an interest charge for not paying on time throughout the year. The tax system is pay-as-you-go, so the IRS expects its money in roughly even installments as you earn. If you wait until April and pay everything at once, you can still owe a penalty for the quarters you underpaid, even if your final return shows a refund. The refund and the penalty are calculated on different things: one on your total tax for the year, the other on the timing of your payments.
That is why “I’ll settle up in April” is a costly strategy for anyone with untaxed income. The safest path is to pay something reasonable each quarter rather than letting the whole bill ride until filing season.
The “safe harbor” that protects you
You do not have to predict your tax bill perfectly to avoid the penalty. The IRS offers safe-harbor rules: generally, you are protected if you pay at least 90% of the current year’s tax, or 100% of last year’s tax, through withholding and estimated payments. That threshold rises to 110% of last year’s tax for higher-income taxpayers. Paying based on last year’s number is often the simplest approach, because you already know it, and it removes the guesswork of forecasting a moving target.
There is also a withholding trick worth knowing. If you or a spouse has a job with withholding, or you take retirement-account distributions, you can increase the tax withheld from those sources late in the year to cover a shortfall. Withholding is treated as if it were paid evenly across the year, which can retroactively cure an underpayment in earlier quarters in a way a late estimated payment cannot.
Retirees have a particularly clean version of this option. You can ask the plan or the Social Security Administration to withhold federal tax from pension payments, IRA distributions, or Social Security benefits, which spares you from writing quarterly checks at all. Many people find it simpler to set up steady withholding once than to remember four deadlines a year. If you would rather stick with estimated payments, mark all four due dates now, because the remaining 2026 installment after September falls in January 2027, and missing that one carries the same kind of penalty as skipping this one.
How to make the September payment
Paying is straightforward. You can pay online directly through the IRS, including IRS Direct Pay from a bank account or the Electronic Federal Tax Payment System, or by debit or credit card for a fee. Many people use Form 1040-ES worksheets to figure the amount. Keep a record of what you paid and when, because you will reconcile these payments against your total tax on next spring’s return.
If your income has been uneven this year, the payment does not have to match the earlier quarters. You can pay based on what you have actually earned so far, using the annualized-income method, which helps people whose income arrives in bursts rather than evenly.
Mark the date and pay something
The core message is simple: if you have income without withholding, September 15 is a real deadline, and the penalty for skipping it can apply even when you are otherwise square with the IRS. Use last year’s tax as a safe-harbor guide, consider bumping up withholding elsewhere to fill a gap, and make the payment on time. A few minutes now is cheaper than an interest charge later.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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