Taxpayers question requirements for safe harbor payments
12 posts across 2 communities in the last 30 days; 75% from r/tax.
“Check what the contribution schedule is. I worked for a company that did quarterly contributions into a safe harbor and they had until the end of the following quarter to make the deposit. So if someone started in the beginning of a quarter they could got almost 6 months without…”
“It’s fine yeah. As long as it’s marked for the proper tax year [re: Accidentally clicked estimate instead of balance due when making 2025 payment. Correct year was indicated, however.]”
“Totally fine. Reasonable comp is judged annually, so 1 Dec payroll works. File $0 941s for other qtrs & deposit on time. Bonus: W/H counts as paid evenly thru the yr, so it covers your est tax too. [re: Payroll Processing for solo scorp]”
Several users are inquiring about the specific requirements to meet the safe harbor rule for estimated tax payments. Questions include whether equal payments throughout the year are necessary and if Roth accounts or 401k rollovers qualify, with one user detailing their payment strategy for a large capital gain.
SOURCES (21)
“Check what the contribution schedule is. I worked for a company that did quarterly contributions into a safe harbor and they had until the end of the following quarter to make the deposit. So if someone started in the beginning of a quarter they could…”
“It’s fine yeah. As long as it’s marked for the proper tax year [re: Accidentally clicked estimate instead of balance due when making 2025 payment. Correct year was indicated, however.]”
“Totally fine. Reasonable comp is judged annually, so 1 Dec payroll works. File $0 941s for other qtrs & deposit on time. Bonus: W/H counts as paid evenly thru the yr, so it covers your est tax too. [re: Payroll Processing for solo scorp]”
“Based on my income and investment gains so far, I may owe around $35,000 in additional taxes for 2026. My income includes about $280,000 in W-2 wages, $167,000 in long-term capital gains, and roughly $20,000 combined in short-term gains, dividends, and interest so far. What steps can I still take before the end of the year to reduce my tax bill or avoid a large amount due at filing? I’m an immigrant and understand there may be restrictions on owning or operating a business or LLC, so I’m especia”
“If you've already paid all the tax you'll owe for 2026, then sure, it's fine to go exempt for the end of the year. Just make sure you don't miscalculate and that you switch back in January. [re: Tax exemption for a few months]”
“The easiest way to do this is to pay just enough tax to reach a safe harbor. If you look at your 2025 tax return, which you filed during 2026, make sure your withholding is at least equal to the amount on Line 24 of your 1040. If your AGI last year was over $150K, then your withholding needs to be 110% of the amount on Line 24. If it doesn't look like you're on track for that, then submit one new W-4 to get over that hump this year; then when you file your tax return every year, submit a”
“If you meet a Safe Harbor rule, you can set your withholding from wages and forget it. Did you file a 2025 federal tax return this year? [re: How to pay taxes on dividends?]”
“Not sure I understand. Most people don't have enough deductions to match the standard deduction. If they did , then they would itemize. So the standard deduction is giving people more deductions than they actually have. There is nothing leftover to rollover because they are actually getting more than they technically should get. A rollover happens when you have to use less deduction than you should get. Like in a capital loss.”
“The safe-harbor rule (this is the big one): you generally avoid the underpayment penalty if your estimated payments cover either: 90% of this year's tax, or 100% of last year's total tax (110% if last year's AGI was over $150k) The second one is easier because you already know the number. How to pay: IRS Direct Pay online. It's free, takes 5 minutes and needs no account. Simple routine: once a quarter, add up your income, subtract business expenses, set aside your percentage, and”
“Hello, I read a bunch of posts along these lines, but as usual, everyone's situation is a bit different, so hope I could beg for some advice. Spouse is getting a couple of big (to us) 1099 payments in the next 6 months - one in the next month, the other in about 6 months. About $40k each. We are in our 60s. Our income: ~$165k (not including these upcoming payments) Our debt: ~$95k mortgage is it. (2.6% interest rate, 10 years left on it.) Savings: ~$500k 401k, $13k in HYSA. I will also get a”
“Hello, My understanding is the amount allowed to shelter on a pre-tax basis including a regular IRA for one person is about $32,000. We are filing jointly. Does this mean the allowed amount is now $64,000? If so, can I contribute $60,000 and my wife contribute $4,000 to retirement accounts or am I limited to just $32,000 because that’s my annual maximum on an individual basis? Thank you for your help! Chris submitted by /u/No-Difficulty4097 [link] [comments]”
“So the cap for both FTP and FTF is a total of 25%? So even if I hit FTF at 5 months and do not pay for another year after that I will not have a FTP after the 5th month?”
“Two other methods that would work is if OP is currently working over withhold on $9875 for the remainder of the year as withholdings are averaged over each quarter regardless to the date received. If OP is over 59.5, or has an inherited IRA do a withdrawal with 100% to the IRS and those also act like withholdings. Only drawback is it does increase total taxable income for the year.”
“I misread the details and thought OP was going to pay the remaining tax due in Q4 instead of waiting until April 15. I agree there would be penalties for Q1 to Q3 underpayments based on them only trying up to prior year tax in Q4”
“I understood OP’s post to read that he used the annualized method for the first three quarters (since his cap gain was in Q4). He then recaptured the savings from those annualized quarters when he made the Q4 payment that covered his PY safe harbor.”
“Since when has it been required that payments be equal throughout the year to meet safe harbour?”
“Damn, that's a good strategy, I'll look into it. I have a Roth and 2 401k rollovers. Do either of those qualify?”
“I made sure to deposit 110% of last year 2024 via my w2 and there was no penalty last year”
“The first 3 quarters of this year i paid estimated payments of 1375 each of the first 3 quarters, total for the 3 being 4125. These cover my first 3 quarters easily. For the 4th quarter I have a large LTCG 300k. I will make a 4th quarter estimated payment of 9875 bringing my total estimated payments to 14k matching my 2025 tax bill. This won't help you meet the safe harbor because to meet the safe harbor based on your 2025 tax liability, you have to have made 4 equal (or in advance), timely”
“2026 is as simple as filing 2210 with your tax return. No it's not, because OP isn't going to meet the safe harbor based on their estimated payments based on their 2026 tax liability since they didn't make equal payments.”
“I want to verify I'm understanding this correct as it will be the first and probably last time I encounter this scenario. 2025 tax year: 103K AGI - 14K Tax Bill 2026 tax year. 296K AGI - 44K Tax Bill The first 3 quarters of this year i paid estimated payments of 1375 each of the first 3 quarters, total for the 3 being 4125. These cover my first 3 quarters easily. For the 4th quarter I have a large LTCG 300k. I will make a 4th quarter estimated payment of 9875 bringing my total estimated paym”