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2026 estimated taxes: what Form 1040-ES actually requires

By Andrew James Flores, Nathan Management · Updated September 23, 2026 · Editorial Standards

When clients pay you without withholding any tax, the IRS expects you to pay during the year through estimated tax. Form 1040-ES settles three questions: whether you have to pay at all, the smallest total that keeps you clear of the underpayment penalty, and the four dates it is due. This guide works through each one with the line numbers from the 2026 form, six worked examples, and a simple way to turn the result into a set-aside you apply to every client payment.

Step 1: check whether you have to pay at all

The 2026 Form 1040-ES uses a two-part test. In most cases you must make estimated payments only when both parts are true:

1. You expect to owe at least $1,000 for 2026 after subtracting your withholding and refundable credits.
2. Your withholding and refundable credits will fall short of the smaller of 90% of the tax on your 2026 return or 100% of the tax on your 2025 return. The 2025 return has to cover all 12 months.

Two special rules change the percentages. If your 2025 adjusted gross income (AGI) was more than $150,000, or more than $75,000 if your 2026 filing status is married filing separately, use 110% of your 2025 tax instead of 100%. If at least two-thirds of your gross income for 2025 or 2026 comes from farming or fishing, use 66⅔% instead of 90%, and the 110% rule does not apply to you.

There is also a clean exit. If you were a U.S. citizen or resident alien for all of 2025 and had no tax liability for the full 12-month year, meaning your total tax was zero or you did not have to file, you do not have to pay estimated tax for 2026.

Step 2: find your 2025 tax on Form 1040, line 24

The prior-year route needs one number from last year’s return, and it is easy to pick up the wrong one. The balance you paid in April and the refund you received are both the wrong number. Form 1040-ES defines your 2025 tax as the amount on line 24 of your 2025 Form 1040 or 1040-SR (total tax), reduced by four items:

• Unreported Social Security and Medicare tax or RRTA tax from Schedule 2, lines 5 and 6.
• Any tax on Schedule 2, line 8, for excess contributions to an IRA, Archer MSA, Coverdell education savings account, health savings account or ABLE account, or for excess accumulations in qualified retirement plans.
• The Schedule 2 amounts the form lists under its Exception 2, such as uncollected Social Security and Medicare tax on tips or group-term life insurance (Schedule 2, line 13).
• Refundable credits on Form 1040 lines 27a, 28, 29 and 30, and on Schedule 3 lines 9 and 12.

If none of the Schedule 2 items apply to you, your 2025 tax is line 24 minus those refundable credits. Two situations change it further. If you will file jointly for 2026 but filed separately for 2025, add both spouses’ 2025 tax together. If you did not file a 2025 return, or your 2025 tax year was shorter than 12 months, skip the prior-year route; the 90% figure becomes your required payment.

Step 3: fill the worksheet lines that set your payment

The 2026 Estimated Tax Worksheet inside Form 1040-ES runs from line 1 to line 15. Lines 1 through 11c build your projected 2026 tax; lines 12a through 15 turn that projection into a payment. The table shows what goes on each line and where the number comes from.

Six worked examples

Each column runs one situation through lines 11c to 15. All six assume a calendar year, no farming or fishing income and no 2025 overpayment applied. Only Example B has 2025 AGI over $150,000.

• A. With income rising, 90% of the 2026 tax ($23,400) is larger than the whole 2025 tax ($18,000), so the prior-year route sets the payment at $4,500 a quarter.
• B. The same freelancer with 2025 AGI over $150,000 uses 110% of $18,000, which is $19,800. That is still below $23,400, so each installment is $4,950.
• C. Example A plus $7,200 of expected withholding from a part-time job. Withholding counts against the same $18,000 target, so the four payments drop to $2,700 each.
• D. With income falling, 90% of the lower 2026 tax ($10,800) is the smaller figure and cuts each payment to $2,700. This route relies on the projection, so it needs the mid-year recheck described below.
• E. Withholding of $8,400 already exceeds the $8,000 required annual payment, so line 14a is below zero and the worksheet stops. The remaining $600 is paid with the return.
• F. Line 14a is positive, but line 14b shows only $800 of tax left after withholding. That is under the $1,000 threshold, so no estimated payments are required.

The last row is the one people miss. The required annual payment protects you from the underpayment penalty; it does not settle the year’s tax. In Example A the four payments total $18,000 against a projected $26,000 bill, so $8,000 is still due with the 2026 return.

Step 4: pay on the 2026 due dates

The whole year’s estimate could be paid by April 15, 2026, or split into four equal amounts. The April 15, June 15 and September 15, 2026 due dates have passed; the remaining 2026 installment is due January 15, 2027. The due dates were closer together in spring than they are in winter, which matters for cash flow.

If you mail a check, the U.S. postmark date counts as the payment date. The 2026 form adds that the postmark is the date the letter is processed at a USPS facility, which can be later than the day you drop it in a mailbox. Author’s practice: pay electronically and save the confirmation, or mail several days before the due date.

You can also make more than four payments. The form’s condition is that the total you pay during each payment period reaches the amount required by that period’s due date. Author’s practice for irregular client income: send part of the next installment whenever a large payment clears, and check the running total against the installment a week before each due date.

Turn the worksheet into a set-aside for every client payment

The worksheet tells you what to pay the IRS and when. A separate question is how much of each client payment to move out of your operating account so the money is there on the due date. Skip the universal 25%, 30% or 35% rules you see quoted online: filing status, deductions, other income, withholding and state tax all move the right percentage, and your own worksheet already contains it.

Author’s practice: divide line 11c minus line 13 (your projected tax after withholding) by the client payments you expect to collect this year. Move that percentage of every payment into a separate tax account the day it arrives. Pay the IRS the line 15 installment on each due date and leave the rest in the account for the return.

For Example A with $120,000 of expected client payments, $26,000 ÷ $120,000 is 21.7%, so a $4,000 client payment sends $866.67 to the tax account. If collections arrive as planned, the account funds the four $4,500 installments during the year and still holds the $8,000 due with the return.

Self-employment tax on the calculator’s starting example

The calculator field “Personal income goal, before taxes ($/year)” means exactly that: the money comes before income tax and self-employment tax, so both are paid out of it. Take the calculator’s starting values as assumed inputs ($80,000 invoiced, $5,000 of business operating costs, a $75,000 income goal), with all $5,000 deductible as business expenses: Schedule C net profit is $75,000. This is the form’s 2026 Self-Employment Tax and Deduction Worksheet for that profit with no wage income:

That is $2,649.29 a quarter, about 13.2% of the $80,000 invoiced, before any income tax. Line 1 of the estimated tax worksheet then starts from $75,000 minus $5,298.58, or $69,701.42 of AGI, when there is no other income or adjustment. The form counts 92.35% of net profit as net earnings from self-employment. The 12.4% Social Security portion stops at the $184,500 wage base for 2026, set by the Social Security Administration as printed in IRS Form 1040-ES (2026); the 2.9% Medicare portion has no cap. If you also earn wages, line 6 shrinks the room left under that cap. The self-employment tax guide covers each factor in more depth.

Recheck mid-year, especially on the 90% route

Form 1040-ES lets you refigure your estimate whenever income, deductions or credits change, and it points to “Amended estimated tax” in chapter 2 of IRS Publication 505 for the remaining payments. The catch: if a payment you already made is less than one-fourth of the amended estimate, you may owe a penalty for that period.

Take Example D. After paying $2,700 in April and June, a large contract lands in July and the 2026 projection rises from $12,000 to $20,000. Ninety percent is now $18,000, the same as the prior-year amount, so the required annual payment becomes $18,000. Bringing the total paid up to three of four installments ($13,500) by September 15 means a September payment of $8,100 ($13,500 minus the $5,400 already paid), then $4,500 in January, with $2,000 left for the return. The April and June payments each fell $1,800 short of one-fourth of $18,000, so those two periods can carry a penalty unless the annualized income method shows the income arrived later.

Author’s practice: on the 90% route, rerun the worksheet before the June and September due dates. On the prior-year route, the required payment is fixed on day one, so a strong year changes only the balance due with the return.

Uneven income: the annualized income installment method

If most of your income arrives late in the year, such as a seasonal business or a large contract in the fall, four equal installments can demand more in the early periods than the income supports. Form 1040-ES says the annualized income installment method may lower or eliminate the required payment for one or more periods, with the details in chapter 2 of Publication 505.

The method also covers late starters. If a large change in income, deductions, additional taxes or credits after March 31, 2026 first requires you to make payments, figure them with the annualized method. Anyone who uses it files Form 2210, including Schedule AI, with the 2026 return, even when no penalty is owed. Author’s practice: if there is any chance you will use the method, keep monthly income and expense totals from January so each period can be rebuilt later.

Withholding can do the job instead

If you also receive wages, Form 1040-ES notes that you may be able to avoid estimated payments by filing a new Form W-4 and asking your employer to withhold more. Extra withholding goes on line 13, so it lowers lines 14a and 14b directly, as Example C shows. The IRS Tax Withholding Estimator at IRS.gov/W4App checks whether a W-4 change is enough to cover the gap.

How to pay, and what it costs

Cash payments are arranged through IRS.gov/PayCash; never mail cash. Whatever method you choose, make sure the payment is applied to 2026 estimated tax and save the confirmation with the matching bank record.

Keep a payment record

Form 1040-ES includes a Record of Estimated Tax Payments. Here it is filled in for Example A, with a $1,200 overpayment from 2025 credited to the first installment:

The overpayment lowers the first voucher to $3,300, because line 15 subtracts any 2025 overpayment you apply to that installment. Keep each confirmation number next to its row.

Your state is a separate plan

Form 1040-ES covers federal tax only. States that tax income set their own estimated-tax forms, thresholds and due dates, so build a second worksheet from your state revenue department’s current form instead of copying the federal schedule.

Checklist for the year

• Your 2025 Form 1040, line 24, with the Step 2 reductions written beside it.
• A dated 2026 projection of net profit, other income, deductions and credits.
• The completed 2026 Estimated Tax Worksheet and Self-Employment Tax and Deduction Worksheet.
• Expected withholding from pay stubs, plus any new Form W-4.
• Payment confirmations matched to each due date and amount.
• Monthly income and expense totals if you might use the annualized method, plus Form 2210 and Schedule AI when you do.
• The same set of records for your state.

Sources

Rules, dates and line numbers on this page, checked September 23, 2026 against the revision dated February 12, 2026, come from the 2026 Form 1040-ES, except the Additional Medicare Tax thresholds (IRS Tax Topic 560) and the amended-estimate details (IRS Publication 505, chapter 2).

• Internal Revenue Service — Form 1040-ES (2026), Estimated Tax for Individuals (PDF).
• Internal Revenue Service — About Form 1040-ES, Estimated Tax for Individuals.
• Internal Revenue Service — Tax Topic 554, Self-employment tax.
• Internal Revenue Service — Tax Topic 560, Additional Medicare Tax.

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