Quarterly estimated taxes catch many business owners off guard in September. The third federal payment for 2026 is due Tuesday, September 15. If you are self-employed and expect to owe at least $1,000 in federal tax this year, the IRS expects a payment that day. California is different. The Franchise Tax Board requires no third installment at all.
These payments trip up otherwise organized business owners. The rules are not hard, but the IRS and California follow different schedules. Guessing wrong costs real money. Underpayment penalties accrue for each quarter, so you cannot simply make up a missed September payment in January without cost.
Who must pay quarterly estimated taxes
The IRS sets the federal bar at $1,000. If you expect to owe that much when you file, after withholding and credits, you generally must pay quarterly. Corporations must pay once they expect to owe $500 or more. In practice, that covers most freelancers, contractors, partners, and S corporation shareholders without paycheck withholding.
California sets its own threshold. Per the FTB, state estimated payments apply once you expect to owe at least $500, or $250 if married or an RDP filing separately. There is also a second condition: your withholding must fall short of the safe harbor amounts described below.
Here is a useful nuance. If you or your spouse also holds a W-2 job, you can often raise paycheck withholding instead. The IRS treats withholding as spread evenly across the year, so a fall adjustment can quietly fix an earlier shortfall.
September 15: the IRS wants a payment, California does not
This is the detail most generic articles miss. Both governments use the same due dates, yet they weight the installments completely differently. As of July 2026, the FTB front-loads California estimated tax. The split is 30 percent in April, 40 percent in June, nothing in September, and 30 percent in January.
So on September 15, 2026, a Los Angeles business owner owes the IRS a payment and owes Sacramento nothing. Check that the California portion actually went out in April and June. By June 15, 70 percent of the year’s state estimate was already due.
2026 estimated tax due dates and amounts
Both schedules for tax year 2026, straight from the IRS and FTB:
| Payment | Due date | Federal (IRS) | California (FTB) |
|---|---|---|---|
| Q1 | April 15, 2026 | 25% | 30% |
| Q2 | June 15, 2026 | 25% | 40% |
| Q3 | September 15, 2026 | 25% | 0% |
| Q4 | January 15, 2027 | 25% | 30% |
If a due date lands on a weekend or legal holiday, the next business day counts as on time. Federal payments go through IRS.gov/payments or your IRS online account. For California, the FTB’s Web Pay is the easiest route.
How much to pay: the safe harbor rules
You do not need to predict your income perfectly. Both agencies publish safe harbors, and paying to the safe harbor is how most owners avoid underpayment penalties.
- Federal: pay at least 90 percent of your 2026 tax, or 100 percent of your 2025 tax, whichever is smaller. Higher earners must use a larger prior-year percentage. IRS Publication 505 has the details.
- California: pay at least 90 percent of your 2026 tax, or 100 percent of your 2025 tax. If your prior-year California AGI passed $150,000, the prior-year option rises to 110 percent. Once current-year California AGI reaches $1,000,000, the prior-year option disappears, and 90 percent of the current year is the only path. Married/RDP separate filers hit these thresholds at half those amounts.
In a growth year, the prior-year safe harbor is the low-stress option. If 2026 is running well ahead of 2025, paying against last year’s tax protects you from penalties. You then settle the extra balance when you file. In a down year, the 90 percent route keeps cash in the business. But it only works if you actually know what 90 percent of this year looks like. That is a bookkeeping question, not a tax question.
Clean books make quarterly estimated taxes painless
The tax calculation itself belongs to your CPA or enrolled agent. What decides whether that calculation is easy and accurate is the state of your books on the day it happens. September is the best checkpoint of the year for this. You have eight months of real data, and still enough runway to correct course before year-end.
Before the September 15 payment, we want every client’s books to show:
- Reconciled accounts through August. A year-to-date profit and loss built on unreconciled bank feeds is a guess wearing a report’s clothing.
- Owner draws separated from expenses. Draws are not deductions. When draws hide in expense categories, they understate your profit. Your estimate then comes in low, and that is how surprise penalties happen.
- Correctly categorized income. Loan proceeds and transfers between accounts are not revenue. We see this constantly in books that ran on autopilot, and it inflates both profit and payments.
- A current year-to-date P&L your tax professional can annualize. Eight clean months let a CPA project the full year with confidence. Nobody has to pad the payment “to be safe.”
If your books sit months behind, the fix is a bookkeeping cleanup before the deadline, not a bigger guess. Also, if contractors are part of your cost structure, tightening that tracking now saves you in January. Our guide to common 1099 mistakes covers it.
How Books LA handles this
Books LA is a bookkeeping firm, not a CPA firm, and we do not advise on income tax. Our lane is the books themselves, plus the transactional side: payroll coordination, sales and use tax, and local business tax filings. We keep monthly books for Los Angeles small businesses in QuickBooks Online and Xero, so every quarter closes reconciled and ready. Before each estimated tax deadline, our clients hand their CPA a current, accurate year-to-date P&L instead of a shoebox and an apology. Details are on our services page.
Frequently asked questions
What happens if I miss the September 15 estimated tax payment?
The IRS charges an underpayment penalty that works like interest, and it runs per payment period. Paying more in January does not erase it. However, paying as soon as possible after the deadline stops it from growing. Ask your tax professional about penalty relief if a disaster or unusual circumstance caused the miss.
Do I owe California estimated taxes on September 15?
No. As of July 2026, California’s installment schedule for individuals is 30 percent in April, 40 percent in June, 0 percent in September, and 30 percent the following January. Your third federal payment is still due September 15. Confirm your own situation with your tax professional or on the FTB’s estimated tax page.
How do I know how much to send with each payment?
Most owners pay to a safe harbor based on last year’s tax, split across the installments. Your CPA or enrolled agent sets the exact vouchers from a current year-to-date profit and loss. That is why the books need to be reconciled before that conversation, and it is the part we handle.
Can I skip quarterlies and pay everything when I file?
You can, but it costs you. The IRS assesses the penalty for each quarter you underpaid, even if you pay in full by April. For most profitable businesses, quarterly payments cost less than the penalty. They are also easier on cash flow than one large spring bill.
Do LLCs and S corporations make estimated payments?
For federal income tax, profits from LLCs, partnerships, and S corporations flow through to the owners. The owners then make personal estimated payments on that income. The entities themselves can owe separate California amounts, such as the annual franchise tax, with their own deadlines. Ask your tax professional which apply to your entity.
What if my income is uneven or seasonal?
The IRS offers an annualized installment method that matches payments to when the income actually arrived. It takes more math and a clean month-by-month P&L, which is where good bookkeeping earns its keep. Your CPA can tell you whether it saves you money for the year.
Does a W-2 job change my estimated payments?
Often, yes. Tax withheld from a paycheck counts as paid evenly through the year, no matter when it comes out. So raising your withholding, or your spouse’s, in the fall can cover a shortfall from earlier quarters. Many owners with side income use this instead of quarterly vouchers.
If you want your books deadline-ready before September, book a short call with Books LA or request a bookkeeping review.
This article is general information for small business owners, not tax advice. Books LA provides bookkeeping services and does not provide income tax advice; we work with our clients’ CPAs on income tax matters. Confirm deadlines and amounts for your situation with your CPA, enrolled agent, or the IRS and FTB directly.
