Estimated-Tax Safe Harbor: One Number Every LLC Owner Should Know Before September 15

Updated: August 2026 · Industry Advisors · Education, not legal or tax advice.

Fifteen days out from the September 15 estimated-tax deadline, one number determines whether you owe an underpayment penalty next April: your safe-harbor number. Compute it in ten minutes, pay it in fifteen, and you can stop thinking about quarterly taxes until January.

This is the plain-English version of the safe-harbor rule, the two ways to hit it, and the arithmetic for the September 15 payment.

What "Safe Harbor" Means

The IRS charges an underpayment penalty when your total year's tax withholding + estimated payments falls short of what you owe. There are two ways to be considered "safe" — to escape the penalty entirely — regardless of what your actual year-end tax bill turns out to be:

1. Pay 100% of last year's total tax liability, split into four equal quarterly payments. (110% if last year's AGI was over $150,000.)
2. Pay 90% of this year's actual tax liability, split into four quarterly payments.

Meet either one and the underpayment penalty is off the table.

The first option is called the prior-year safe harbor and it is what most LLC owners should use. Why? Because last year's number is already known and won't change. This year's number is a moving target until the year closes.

The One Number To Know

Pull last year's Form 1040. Look at line 24 — Total Tax. That is your safe-harbor base.

Your annual safe-harbor amount is:

• 100% of that number, if your prior-year AGI was $150,000 or less
• 110% of that number, if your prior-year AGI was above $150,000

Divide by four. That is what each quarterly payment should be.

Worked Examples

Example 1 — Solo LLC Owner

Prior year total tax (Form 1040 line 24): $12,400. Prior year AGI under $150K, so safe harbor = 100% = $12,400. Each quarterly payment = $3,100.

If you paid $3,100 in April, $3,100 in June, and pay $3,100 on September 15, you have paid $9,300. Regardless of how much you actually owe this year, no underpayment penalty. Pay the last $3,100 on January 15, and you're done.

Example 2 — Higher-Income Owner

Prior year total tax: $47,800. Prior year AGI = $185,000, so 110% safe harbor = $52,580. Each quarterly payment = $13,145.

Example 3 — Catching Up If You Missed Q1 And Q2

Same profile as Example 1. You missed the April 15 and June 15 payments. Cumulative safe harbor through September 15 is $9,300. Pay the full $9,300 on September 15 to catch up — you'll still owe a small underpayment penalty on the Q1 and Q2 amounts that were late, but it stops accruing on that portion the moment you pay.

What If Last Year's Tax Bill Was Zero

If you owed no tax last year and you were a US citizen or resident for the full year with a return covering all 12 months, the prior-year safe harbor is $0. That means no estimated tax owed this year, no matter what. Confirm with your CPA before assuming you qualify — the technical rule has narrow exceptions.

What If This Year Is Dramatically Different

Two common cases:

This Year Is Worse (Revenue Up Sharply)

Prior-year safe harbor still protects you from the underpayment penalty. But you will owe a large lump sum on April 15 for the shortfall. Set aside the estimated additional tax as revenue arrives so April is not a scramble.

This Year Is Better (Revenue Down Sharply)

Prior-year safe harbor may over-pay significantly. Switch to the 90%-of-current-year safe harbor — estimate the year's tax bill, pay 90% of it in four installments. You get the refund in April.

Where To Pay On September 15

• IRS Direct Pay — irs.gov/payments. Free, no account, immediate confirmation.
• EFTPS — if you're already enrolled.
• Card payment — IRS-authorized processors charge roughly 1.75–1.99%.

Select Estimated Tax (1040-ES) and tax year 2026. Save the confirmation number.

The State Side — Do The Same Math

Nearly every income-tax state has a mirror safe-harbor rule. Pull last year's state return, find the total tax line, divide by four, and pay the state's quarterly portal by September 15. California, New York, and Illinois all use the same September 15 date.

The 10-Minute Checklist For September 15

1. Pull last year's Form 1040 — look at line 24
2. Multiply by 100% (or 110% if AGI was over $150K)
3. Divide by four — that is your quarterly amount
4. Confirm what you've paid in Q1 and Q2
5. Pay whatever is needed to hit the Q3 cumulative safe harbor on September 15
6. Repeat for your state

Ten minutes. Fifteen more days.

The Everyday Owner's Blueprint includes a safe-harbor calculator, the state-by-state estimated-tax portals, and the 12-month tax and compliance calendar.

Industry Advisors · 30 Wall Street, New York, NY 10005. Education, not legal or tax advice. Confirm your specific numbers with a licensed tax preparer before you pay.