September 15 Is the Third Quarter Estimated Tax Deadline

If you make or receive income that is not fully covered by withholding, September 15, 2026 is an important date on the tax calendar. It is the due date for the third installment of 2026 federal estimated tax payments for individuals who are not paying enough through withholding during the year.

Why Estimated Tax Payments Matter

Our tax system is a “pay-as-you-earn” system, which means taxes are generally expected to be paid as income is earned, not all at once when the return for the year is filed. For many taxpayers, wage withholding handles that automatically. But if you receive income where no tax is withheld, estimated payments may be necessary.

This often applies to taxpayers with income such as:

self-employment income,
interest and dividends,
capital gains,
rental income, or
other income not subject to withholding.

Self-employed taxpayers especially need to pay attention, because estimated tax payments may need to cover both income tax and self-employment tax.

Who Should Make Estimated Tax Payments?

You should generally consider estimated tax payments if you have no withholding or expect the withholding you do have will not be enough to cover your tax for the year. Common examples include:

freelancers and independent contractors,
business owners,
retirees with taxable investment income,
landlords,
taxpayers with significant side income, and
anyone who has had a major change in income during the year.

Unexpected Income Can Create a Surprise Tax Bill

One of the biggest reasons taxpayers miss estimated tax deadlines is unexpected income. A bonus, a large capital gain, a profitable investment sale, an IRA distribution, or a successful side business can push your tax bill higher than expected.

If you receive income like that late in the year, an estimated payment can help reduce what you owe when you file your return. In some cases, making a payment before the deadline can also help reduce or avoid an underpayment penalty.

The Underpayment Penalty

If not enough tax is prepaid through withholding and estimated payments, a taxpayer may owe an underpayment penalty. This penalty is essentially interest charged on the unpaid amount. It is figured quarter by quarter and the rate charged is adjusted periodically. The current rate is 7%.

There is also a small exception for some taxpayers: if the underpayment is less than $1,000, no penalty is assessed.

Safe Harbor Rules: A Way to Avoid the Penalty

For taxpayers who are unsure how much income they will have for the year, the safest approach is often to use the safe harbor rules, one of which is to pay estimated tax equal to the prior year’s tax. For higher-income taxpayers, the estimated tax payment needed to avoid a penalty is the smaller of:

90% of the expected tax for the current year, or
110% of the tax shown on the prior year return if the prior-year’s adjusted gross income was more than $150,000, or $75,000 if married filing separately.

This can be a helpful rule of thumb when income fluctuates or when it is difficult to predict year-end results.

Paying Online is Usually the Best Option

The IRS says estimated tax payments can be made electronically. In most cases, online payment is better than mailing a paper check because it is:

faster,
more secure,
easier to confirm,
less likely to be delayed than if mailed, and
immediately recorded for your tax history.

With a paper check, you have to worry about mailing time, postal delays, and proof of delivery. Online payment eliminates those concerns and gives you a cleaner record of when you paid.

Don’t Wait Until the Last Minute

September 15 is the third quarter estimated tax deadline, so if you need to make a payment, it is wise to do it early rather than waiting until the due date.

If you are not sure whether you should make an estimated payment, or you are unsure how much to pay, please contact this office for help determining the right amount.

If you have any questions, please contact our office at (503) 224-5321. Isler Northwest LLC is a firm of business advisors and CPAs in Portland, Oregon. Our service goal at Isler Northwest is to earn our clients’ trust as their primary business and financial advisor.

Isler Northwest
(503) 224-5321
1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201