Estimated taxes: your last 2026 payment is due January 15, 2027

When is the next estimated tax payment due?

The fourth and last estimated tax payment for 2026 is due Friday, January 15, 2027. It covers income earned from September 1 to December 31, 2026. Here is the full 2026 schedule from the IRS:

You can skip the January payment if you file your 2026 return by Monday, February 1, 2027 and pay the entire balance with it. That only replaces the fourth payment. If you underpaid in April, June or September, those installments still carry a penalty.

Three things change the calendar:

• Farmers and fishers (at least two thirds of gross income from farming or fishing) make one payment by January 15, 2027, or file and pay in full by March 1, 2027.
• Hurricane Isaias relief: in 27 Florida counties, estimated payments due on or after October 9, 2026 are postponed to February 8, 2027. Other 2026 disaster areas, in Alabama and several other states, have their own postponed dates on the IRS's disaster relief page.
• Mailed payments: the postmark that counts is the date the Postal Service processes the envelope at a facility, which can be later than the day you drop it off. Pay online by January 15 instead.

The IRS has not published the 2027 Form 1040-ES yet, so next year's dates are not final.

Do I have to make estimated tax payments?

You must pay estimated tax for 2026 if both of these are true:

1. You expect to owe at least $1,000 for 2026 after subtracting withholding and refundable credits.
2. Your withholding and refundable credits will fall short of the safe harbor below.

That catches most profitable sole proprietors, freelancers, partners and S corporation shareholders, because nobody withholds tax from business profit. You owe no 2026 estimates if you were a US citizen or resident for all of 2025 and had no tax liability for that full year.

How much to pay: the safe harbors

You avoid the penalty if your estimates plus withholding, paid on time, reach the smaller of these targets:

The prior year rule needs a 2025 return that covered all 12 months. When income is rising, it is the easy one: the number is already on last year's return, and it does not move however good 2026 turns out.

Worked example: a freelancer whose income doubled

Say a freelance designer's 2025 return showed $18,000 of total tax on AGI of $140,000. Business doubled in 2026, and she now expects about $36,000 of total tax.

• 90% of her 2026 tax: $36,000 × 90% = $32,400
• 100% of her 2025 tax: $18,000
• Her target is the smaller one, $18,000, which is $4,500 on each of the four dates

If her 2025 AGI had been $160,000, the target would be 110%: $18,000 × 110% = $19,800, or $4,950 a payment.

Four payments of $4,500 mean no penalty, even though she earned twice as much. They do not mean no tax. She still owes the other $18,000 ($36,000 minus $18,000) when she files by April 15, 2027, so that money needs to be set aside now.

The mistake: catching up in January

The mistake a bookkeeper sees every January: skip April through September, pay the full $18,000 on January 15, and assume the year is square. The penalty is figured separately for each installment, for the days it was unpaid. A January payment stops the clock. It does not erase days already counted.

Each line is $4,500 × days late ÷ 365 × the rate: 6% from April 16 to June 30, 2026, and 7% from July 1 to December 31. The IRS has not announced the rate for January 2027 yet, so the table uses 7% for January 1 to 15. That is our assumption: each percentage point of difference moves the total by about $6.

How the underpayment penalty is figured

The penalty works like simple interest, not daily compounding. Form 2210 multiplies each underpayment by the number of days it stayed unpaid, divides by 365, and multiplies by the IRS underpayment rate for that stretch. The IRS sets the rate each quarter. For individuals in 2026 it was 7% in January to March, 6% in April to June, and 7% from July through December.

The IRS can waive the penalty when a casualty, disaster or other unusual circumstance caused the shortfall, or when you retired after reaching 62 or became disabled, in the tax year or the year before, and the shortfall had reasonable cause.

Lumpy income: the annualized income installment method

If most of your 2026 income arrived late in the year, the annualized income installment method figures each required payment on the income you had earned by the end of that period, so early payments can be smaller. You claim it on Form 2210 with Schedule AI, filed with your return even if you owe no penalty, and once you use it for one due date you use it for all four.

How to pay estimated taxes now that EFTPS is closing to individuals

For individuals, the IRS lists these ways to pay:

• IRS Online Account (IRS.gov/Account): make the payment and see your payment history.
• IRS Direct Pay (IRS.gov/Payments): free transfers from a checking or savings account.
• Debit card, credit card or digital wallet: the card processor charges a fee.
• Electronic funds withdrawal when you e-file, for a payment sent with the return.

EFTPS is closing to individuals. New individual enrollment ended October 17, 2025. People already enrolled can still pay there, but the IRS says EFTPS payment options will be sunset for individual taxpayers in late 2026. If that is how you paid in September, set up Direct Pay or your Online Account before January 15.

Businesses are not part of that change. Federal tax deposits, such as payroll taxes, still go through EFTPS or the IRS Business Tax Account. Whichever route you use, apply the payment to 2026 estimated tax and save the confirmation number.

How to record estimated tax payments in your books

An estimated payment is your personal income tax, even when it leaves the business bank account.

• Sole proprietor or single member LLC: IRS Publication 334 is blunt: "Do not deduct federal income tax." Book the payment as an owner's draw, an equity account, not a tax expense. State income tax estimates go the same way, since they belong on Schedule A if you itemize, not on Schedule C. Half of your self-employment tax is deducted on Schedule 1, not as a business expense.
• S corporation owner: the corporation's profit passes through to you and you pay the tax on your personal return. If the S corporation's account pays your estimate, record it as a shareholder distribution, not as the corporation's tax expense.

Booked as an expense, the payment understates profit, and your next estimate starts from the wrong number. That starting number is year to date profit. In BooksGPT, the profit and loss report shows it on cash or accrual, with the transactions behind each line and a comparison to last period.

What to do before January 15

1. Close your books through November, then December as soon as the statements arrive. The year end bookkeeping checklist has the order.
2. Find your 2025 total tax and AGI on last year's return and pick your target: 100% or 110% of 2025 tax, or 90% of your projected 2026 tax if that is lower.
3. Add up what you have already paid: estimates, withholding, and any 2025 overpayment applied to 2026.
4. If you are behind, pay the shortfall now. The penalty runs by the day, so a December payment costs less than a January one.
5. Pay the fourth installment by January 15, 2027 through Direct Pay or your Online Account, or plan to file and pay in full by February 1, 2027.
6. Book every payment as a draw or a distribution and keep the confirmation.