Running a US LLC doesn’t end with filing an annual tax return. If your business is profitable, the IRS expects you to pay taxes throughout the year using estimated tax payments. Missing these payments in 2026 can trigger penalties—even if you eventually pay the full tax.
This guide explains who must pay estimated taxes, how much to pay, deadlines, penalties, and smart strategies to stay compliant.
What Are Estimated Tax Payments?
Estimated taxes are quarterly advance payments made to the IRS on income that is not subject to withholding, such as:
- LLC business income
- Self-employment income
- Rental income
- Interest and dividends
- Foreign-source income taxable in the US
Instead of paying all tax in April, the IRS wants its share as you earn.
Who Must Pay Estimated Taxes in 2026?
You generally must make estimated tax payments if both conditions apply:
- You expect to owe $1,000 or more in federal tax for 2026
- Your withholding and credits are less than:
-
-
90% of your 2026 tax, or
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100% of your 2025 tax (110% for high-income taxpayers)
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Common Cases
- Single-member LLC (Schedule C)
- Multi-member LLC partners
- S-Corp shareholders receiving distributions
- Foreign-owned US LLCs with US-source income
Estimated Tax Due Dates for 2026
| Payment | Income Period Covered | Due Date |
|---|---|---|
| Q1 | Jan 1 – Mar 31, 2026 | April 15, 2026 |
| Q2 | Apr 1 – May 31, 2026 | June 15, 2026 |
| Q3 | Jun 1 – Aug 31, 2026 | September 15, 2026 |
| Q4 | Sep 1 – Dec 31, 2026 | January 15, 2027 |
These are not equal calendar quarters, which often confuses taxpayers.
How to Calculate Estimated Tax for an LLC
Estimated tax usually includes:
- Federal income tax
- Self-employment tax (15.3%) for non-corporate owners
Simple Method (Safe Harbor)
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Pay 100% of last year’s tax (110% if AGI > $150,000)
Actual Income Method
- Estimate your 2026 income
- Subtract deductions and credits
- Divide total tax into four payments
📌 CPA support is strongly recommended if income fluctuates.
Penalty for Missing Estimated Tax Payments
The IRS charges an underpayment penalty, calculated as:
- Interest-based (varies quarterly)
- Applied even if you get a refund later
Why This Hurts
- Penalty is calculated per quarter
- Paying everything in April does NOT eliminate penalties
Special Rules for S-Corps
If you own an S-Corp:
- Salary is subject to payroll withholding
- Distributions are not taxed upfront
- Underpaid payroll withholding can trigger estimated tax penalties
Many owners avoid penalties by increasing W-2 withholding instead of quarterly payments.
Foreign-Owned US LLCs & Estimated Tax
Foreign founders often assume estimated taxes don’t apply—this is risky.
You may still need to pay estimated taxes if:
- The LLC has effectively connected income (ECI)
- Profits are taxable in the US
- No withholding fully covers the tax liability
Estimated tax rules apply regardless of residency.
Best Practices to Stay Penalty-Free in 2026
- Review profits quarterly, not annually
- Use IRS Form 1040-ES worksheets
- Match payments with actual income spikes
- Combine bookkeeping + tax planning
- Set calendar reminders for due dates
Read more: 1031 Exchange Rules: Deadline Mistakes That Cost Investors in 2026
Conclusion
Estimated tax payments are one of the most ignored yet heavily penalized IRS requirements. For US LLC owners in 2026, proactive planning is the difference between smooth compliance and surprise penalties.
If your income isn’t stable—or you’re a foreign founder—professional guidance can save thousands in unnecessary costs.
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