The Long Game Q4 Estimated Tax Payment Planning
Jan 9, 2026
Ryan Dolan, a licensed tax professional and financial advisor specializing in strategies for business owners, shares crucial insights on Q4 estimated tax payments. He explains the importance of understanding 110% vs. 90% safe harbor rules to avoid penalties. Ryan discusses the significance of annualizing income for seasonal businesses and how it can improve cash flow. Listeners learn why overpaying slightly in Q4 might be more beneficial than scrambling come April, along with strategic uses of withholding and bonuses to prevent underpayment surprises.
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Two Safe Harbors And Withholding Counts
- Estimated tax safe harbors are 110% of last year or 90% of the current year and must be paid in equal quarterly increments.
- Withholding counts toward these thresholds and reduces required estimated payments.
Pick A Strategy Based On Income Outlook
- Choose 110% if you expect equal or higher income and split the amount into four quarterly payments.
- Use 90% or annualization if you expect lower or seasonal income to match payments to receipts.
Annualization Protects Seasonal Cash Flow
- Annualizing lets you match tax payments to when income is actually received, avoiding cash-flow stress.
- It protects seasonal earners from paying taxes before they have revenue.