What is safe harbour?

Paying enough to avoid an underpayment penalty regardless of your actual liability. Ninety percent of this year, or a percentage of last year, whichever is lower.

Why is my prior year percentage 110?

Because your prior year AGI exceeded the high income threshold. Above it, safe harbour requires 110 percent of last year rather than 100.

Taxincome taxUnited States only

Estimated Quarterly Tax Calculator

Quarterly estimated tax under the safe harbour rules. Paying on last year's tax avoids penalties regardless of what this year turns out to be, which is the point of the rule and the reason a good year need not be estimated precisely.

Also called: 1040-es calculator, quarterly tax payment.

Payment per remaining quarter

$9,366.67

$9,366.67 per quarter for the 3 remaining. Safe harbour needs $34,100.00 for the year, which is the lower of $34,200.00 on this year and $34,100.00 on last year. Prior year AGI is above the threshold, so safe harbour on last year requires 110 percent rather than 100.

Safe harbour total

$34,100.00

90 percent of this year

$34,200.00

Prior year safe harbour

$34,100.00

Still to pay

$28,100.00

Prior year percentage applied

110%

On safe harbour

Prior year AGI is above the threshold, so safe harbour on last year requires 110 percent rather than 100.

How this is calculated

Computed from the published rates for the tax year you selected, which is not necessarily the current year. A calculation, not tax advice, and it does not know anything about your circumstances beyond the figures entered.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Underpayment penalties are avoided by paying the lower of ninety percent of this year's tax or a percentage of last year's. The prior-year route is the useful one: it is a known number, so a year with unpredictable income can be covered exactly without forecasting. The percentage rises for higher earners, from one hundred to one hundred and ten percent above the threshold, which is the detail that catches people whose income grew. Withholding counts toward the total and is treated as paid evenly through the year regardless of when it happened.

the prior-year percentage is higher for high earners, which is the rule people miss

T: Tax
p: Prior year percentage

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a high earner using prior year safe harbour

Expected tax this year: $38,000.00
Last year total tax: $31,000.00
Withholding expected this year: $6,000.00
Last year AGI: $165,000.00
High income threshold: $150,000.00
Estimated tax already paid: $0.00
Quarters remaining: 3

Payment per remaining quarter$9,366.67

110% of 31,000 is just below 90% of 38,000

Open this example

below the threshold the prior year percentage is 100

Expected tax this year: $38,000.00
Last year total tax: $31,000.00
Withholding expected this year: $6,000.00
Last year AGI: $120,000.00
High income threshold: $150,000.00
Estimated tax already paid: $0.00
Quarters remaining: 3

Payment per remaining quarter$8,333.33

boundary: the threshold

Open this example

withholding covering safe harbour leaves nothing

Expected tax this year: $38,000.00
Last year total tax: $31,000.00
Withholding expected this year: $40,000.00
Last year AGI: $165,000.00
High income threshold: $150,000.00
Estimated tax already paid: $0.00
Quarters remaining: 3

Payment per remaining quarter$0.00

degenerate case

Open this example

Method and limits

What it assumes

Even quarterly payments, which the annualised income method can improve on for uneven income.

What it deliberately does not model

The annualised income installment method suits seasonal income better and is not modelled.
State estimated tax is separate and follows its own rules.
This is an estimate, not tax advice.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

What is safe harbour?: Paying enough to avoid an underpayment penalty regardless of your actual liability. Ninety percent of this year, or a percentage of last year, whichever is lower.
Why is my prior year percentage 110?: Because your prior year AGI exceeded the high income threshold. Above it, safe harbour requires 110 percent of last year rather than 100.