Do quarterly tax estimates have to all be the same?

[disneysteve]

My daughter is now working 2 jobs that are 1099 positions so she has to file quarterly estimates. I have no experience dealing with that as I’ve never needed to do it for us.

She really can’t predict today how much she will make for the year. Do all 4 quarterly estimates need to be the same or can she adjust the amounts each quarter as her income picture becomes clearer?

Thanks for any advice on how to do this.

 

[Texas Proud]

No

 

[GrayHare]

The amonnts can be different provided those amounts are in proportion to that period's tax liability, however tracking income and deductions by period (roughly quarters of a year) can become tedious.

 

[audreyh1]

It’s a lot more complicated to pay estimated taxes based on your current YTD income at the end of each tax quarter.

I recommend instead that she use her prior year taxes and as long as she pays 1/4 of her prior year taxes* each tax quarter she’ll avoid penalty. If she expects a higher tax liability this year compared to last, this even gives her a break.

*As long as your prior year AGI was $150K or less then you just need to match the prior year’s taxes owed to avoid underpayment penalties. If it was above then you are required to pay 110% of the prior year’s taxes in 4 equal payments.

 

[disneysteve]

It’s a lot more complicated to pay estimated taxes based on your current YTD income at the end of each tax quarter.

I recommend instead that she use her prior year taxes and as long as she pays 1/4 of her prior year taxes each tax quarter she’ll avoid penalty. If she expects a higher tax liability this year compared to last, this even gives her a break.

She will almost certainly earn less this year so paying based on last year’s income would just buy her a much bigger refund. She’d rather pay an amount closer to what she’ll actually owe if possible.

 

[Sunset]

She will almost certainly earn less this year so paying based on last year’s income would just buy her a much bigger refund. She’d rather pay an amount closer to what she’ll actually owe if possible.

I used to try to do this, and it's a bunch more work. Plus I made a mistake doing it and then got penalties as well.

Much easier to pay last year total tax due divided by 4 , costs a lot less than the penalty and annoying forms to fill out.

 

[audreyh1]

She will almost certainly earn less this year so paying based on last year’s income would just buy her a much bigger refund. She’d rather pay an amount closer to what she’ll actually owe if possible.

OK, then she has to do the hard work in learning how to properly compute estimated taxes based on the annualized income method.

See IRS Publication 505 and pay attention to annualized estimated taxes. Worksheet 2-7 gives you an idea how it works. It will also be necessary to file Form 2210 with the 1040 return to avoid underpayment penalty.

Publication 505 (2026), Tax Withholding and Estimated Tax | Internal Revenue Service

www.irs.gov

 

[Midpack]

No, I’ve been paying quarterly estimated taxes Federal and State (two different states) since 2011, and they’ve rarely been the same from one quarter to the next, and 4th quarter is always different as I fine tune based on then known income for the year. A few years I’ve had to show the IRS what my income was by quarter, but I’ve rarely seen a penalty and they’ve been trivial when it happens (e.g. $12.76 for 2025).

 

[disneysteve]

Much easier to pay last year total tax due divided by 4 , costs a lot less than the penalty and annoying forms to fill out.

The problem is for reasons not necessary to go into here, her 2026 income will be significantly lower than 2025, like less than half. That would mean overpaying by thousands of dollars just to get a huge refund next spring.

 

[disneysteve]

OK, then she has to do the hard work in learning how to properly compute estimated taxes based on the annualized income method.

See IRS Publication 505 and pay attention to annualized estimated taxes. Worksheet 2-7 gives you an idea how it works. It will also be necessary to file Form 2210 with the 1040 return to avoid underpayment penalty.

Publication 505 (2026), Tax Withholding and Estimated Tax | Internal Revenue Service

www.irs.gov

Thank you. We will look at that.

 

[Ronstar]

For 20 years as a business owner, we took disbursements usually quarterly and I would adjust my quarterly estimated tax payment based on the amount of the disbursement.

 

[Sunset]

The problem is for reasons not necessary to go into here, her 2026 income will be significantly lower than 2025, like less than half. That would mean overpaying by thousands of dollars just to get a huge refund next spring.

Sure , I've done that. I got a large refund.

I do it as my State fined me $250 for doing the calculation wrong, Fed was less cost.

 

[disneysteve]

Sure , I've done that. I got a large refund.

I do it as my State fined me $250 for doing the calculation wrong, Fed was less cost.

Ugh. That sucks. It shouldn't be that onerous for people with variable incomes to pay what they owe.

Her one job is for an outside organization. She knows how much she gets paid per event but can't accurately predict how many events she will work this year. She has a ballpark estimate but it could be more or less. Her other "job" is that she started an online business in December. She knows what she's making right now but hopefully that number will continue to grow as she ramps up the business. Unless she's wildly successful, her total income won't come close to her 2025 number. If she has to pay estimated taxes based on last year, she might as well just send them her entire paychecks because she'd have nothing left.

 

[SevenUp]

The amounts can be different provided those amounts are in proportion to that period's tax liability....

^This.

Disneysteve, have your daughter look at Form 2210. That is the form to determine if she will meet any of the Safe harbors that avoid underpayment penalties.

On Form 2210, Part I considers only withholding. Part III is where estimated tax payments are used. From your description, the "90% of current year's tax liability" will be the safe harbor for her.

The estimated tax payments do not have to be equal, but she can't "fix" an underpayment for an earlier quarter by making a large payment in a later quarter.

Schedule AI in Form 2210 can be a pain, but whether or not to use that will be up to her.

 

[disneysteve]

The estimated tax payments do not have to be equal, but she can't "fix" an underpayment for an earlier quarter by making a large payment in a later quarter.

Okay, that fact helps a lot. Obviously she knows how much she has made this quarter. The unknown is how much she will make in Q2, 3, and 4.

 

[Sunset]

Ugh. That sucks. It shouldn't be that onerous for people with variable incomes to pay what they owe.

....... If she has to pay estimated taxes based on last year, she might as well just send them her entire paychecks because she'd have nothing left.

I agree, the variable payment thing is harder than needed.

Seems like she has no choice but to get good at taxes.

 

[disneysteve]

@cathy63 if you have a moment to weigh in I'd appreciate it.

 

[TheWizard]

Alternately, just sit down and figure a best case upper limit on AGI for her year and start paying estimated taxes based on that.
Monitor progress toward that upper limit as the months pass by.

If your upper limit was $100k and by September it looks like it will be closer to $80k, then reduce your q3 and q4 payments.

This assumes you can compute Federal income tax for a given AGI, which is fairly simple nowadays for many folks with standard deduction...

 

[disneysteve]

What if she's really on the low end of the income curve and her anticipated 2026 income comes in near or even below the standard deduction?

 

[SevenUp]

What if she's really on the low end of the income curve and her anticipated 2026 income comes in near or even below the standard deduction?

What does Form 2210 (the flowchart at the top and Part I) tell you?

Remember to include the self-employment tax amount.

 

[TheWizard]

If she's likely to owe <$1000 in tax, I think that's a safe harbor, so just do zero estimated payments and relax...

 

[cathy63]

@cathy63 if you have a moment to weigh in I'd appreciate it.

What other people have already said is correct. If she doesn't want to overpay and get a huge refund then she has to figure her income on an annualized basis and make estimated payments on the four due dates. The main thing is for her to make sure she's keeping accurate books for both her businesses and is capable of calculating her YTD net profit on Mar 31, May 31, Aug 31 and Dec 31.

Following those dates, she should fill out the appropriate column of Schedule AI and pay enough so that her total equals the amount shown on line 21. If she does that, then she'll end up having paid 90% of what she owes for the year (or more if business declines late in the year), so worst case she'll owe 10% of her total tax next April and she will have paid 90% in a timely fashion, so there will be no penalty.

She still needs to calculate her estimated tax even if she thinks her income will be below the standard deduction. A single person earning exactly $16,100 in 2026 will owe $2275 in self-employment tax and $0 in income tax. That totals more than $1000, so she won't be in a safe harbor just because she makes less than the standard deduction.

 

[audreyh1]

^This.

Disneysteve, have your daughter look at Form 2210. That is the form to determine if she will meet any of the Safe harbors that avoid underpayment penalties.

On Form 2210, Part I considers only withholding. Part III is where estimated tax payments are used. From your description, the "90% of current year's tax liability" will be the safe harbor for her.

The estimated tax payments do not have to be equal, but she can't "fix" an underpayment for an earlier quarter by making a large payment in a later quarter.

Schedule AI in Form 2210 can be a pain, but whether or not to use that will be up to her.

If you use Worksheet 2-7 in publication 505 to calculate each quarter’s estimated tax, you already have all the numbers for Form 2210. So save your quarterly calculations.

 

[FlaMariner]

How much are we talking about?

You may just want to not bother (or just send in a low level guess at some point during the year) or whatever and just pay the penalty....For us, it was not worth the hassle of playing the "quarterly payments & giving too much money ahead of time" to Uncle Sam dance....For several years, we just sent some $$$ in and then paid the adjusted penalty w/the actual amount owed on 4/15.

(Now, life is easier as we are over 59.5 so we can make an IRA withdrawal on 12/31 and it counts as having paid all year.)

 

[disneysteve]

What other people have already said is correct. If she doesn't want to overpay and get a huge refund then she has to figure her income on an annualized basis and make estimated payments on the four due dates. The main thing is for her to make sure she's keeping accurate books for both her businesses and is capable of calculating her YTD net profit on Mar 31, May 31, Aug 31 and Dec 31.

Following those dates, she should fill out the appropriate column of Schedule AI and pay enough so that her total equals the amount shown on line 21. If she does that in a timely fashion, then she'll end up having paid 90% of what she owes for the year (or more if business declines late in the year), so worst case she'll owe 10% of her total tax next April and she will have paid 90% in a timely fashion, so there will be no penalty.

She still needs to calculate her estimated tax even if she thinks her income will be below the standard deduction. A single person earning exactly $16,100 in 2026 will owe $2275 in self-employment tax and $0 in income tax. That totals more than $1000, so she won't be in a safe harbor just because she makes less than the standard deduction.

Thank you!

So for your last paragraph, if she were going to earn $16,100, for her Q1 estimate, she would just pay 1/4 of the SE tax and that's it?