Small Business Taxes
Your Q3 Estimated Tax Payment Is Due September 15. Here Is What You Actually Owe
The federal deadline lands on the same day every September, but California asks for zero dollars this quarter. Here is the real math behind both, and how to avoid a penalty either way.
In 60 Seconds
- Federal Q3 2026 estimated tax payments are due Tuesday, September 15.
- California’s schedule sends 30% in April, 40% in June, 0% in September, and 30% in January, so most business owners owe the IRS this month but not the Franchise Tax Board.
- Safe harbor: pay at least 90% of this year’s tax, or 100% of last year’s tax (110% if your prior year adjusted gross income topped $150,000), spread across the year.
- A sole proprietor netting $150,000 in 2026 owes roughly $21,200 in self-employment tax alone, before federal income tax.
- Missing a payment does not just delay the bill. The IRS charges a penalty that accrues like interest on the shortfall.
Why September Feels Lopsided
Every fall, small business owners across San Diego County ask us the same question: did I miss my state payment? Usually the answer is no, California just does not want your money in September.
The federal government splits estimated tax roughly into four even pieces due April 15, June 15, September 15, and January 15. California instead front loads the year: 30% of your required annual payment is due in April, 40% in June, 0% in September, and the remaining 30% in January. That 0% in the third slot is not a typo. The state folds what would have been your September payment into the following January installment instead.
So this month, you are very likely writing a check to the IRS and nothing to the Franchise Tax Board. That asymmetry trips up a lot of business owners who assume both payments move together.
The Federal Math on a Real Business
Take Maria, who runs a marketing consulting business as a sole proprietor out of Vista and expects to net $150,000 in 2026 after expenses.
Split evenly, that is about $9,300 due each federal quarter, including the payment due September 15. Her CA liability, roughly $9,000 for the year, follows the 30/40/0/30 split instead, so her September CA payment is zero and her next state check is not due until January 15, 2027.
The Safe Harbor Rule That Keeps You Out of Penalty Territory
You do not have to guess your tax bill to the dollar. The IRS gives you a safe harbor: pay at least 90% of what you actually owe for 2026, or 100% of your total 2025 tax bill (110% if your 2025 adjusted gross income was over $150,000), spread evenly across the four due dates, and you will not owe an underpayment penalty even if your final bill is higher.
If your income swings month to month, ask your CPA about the annualized income installment method instead. It lets you base each payment on what you actually earned in that period, which can lower what you owe in a slow quarter, though it takes more paperwork to document.
Either way, skipping a payment does not just push the bill down the road. The penalty accrues like interest on the shortfall, calculated at the federal short term rate plus 3 percentage points, recalculated quarterly. A payment that is late by a few months usually costs less than ignoring it until April, but paying on time costs nothing extra at all.
| Quarter | Due date | Federal share | California share |
|---|---|---|---|
| Q1 | April 15, 2026 | About 25% | 30% |
| Q2 | June 16, 2026 | About 25% | 40% |
| Q3 | September 15, 2026 | About 25% | 0% |
| Q4 | January 15, 2027 | About 25% | 30% |
What To Do This Week
Pull your year to date profit and loss before you estimate anything. Guessing from memory is how business owners either overpay and starve their cash flow or underpay and end up with a penalty next spring. If your bookkeeping is current, this takes minutes. If it is not, that is usually the real problem to fix first.
Set aside your federal payment in a separate savings account as soon as you know the number, so it is not competing with payroll or vendor bills when September 15 arrives. Mark January 15 on your calendar now for the California payment that is quietly waiting for you, since it is easy to assume you are done for the year once the federal check clears.
Frequently Asked Questions
Do I still need to make a September payment to California?
For most individuals and pass-through business owners, no. California’s estimated tax schedule allocates 0% to the third installment, so the amount that would normally fall in September gets folded into your January 15 payment instead. C corporations follow a different schedule, so check with your CPA if that applies to you.
What happens if I skip my federal Q3 payment?
The IRS charges an underpayment penalty that accrues like interest on the shortfall, currently based on the federal short term rate plus 3 percentage points. It is not a flat fee. It grows the longer the balance sits unpaid, so a partial payment now is better than waiting until your return is filed.
How do I estimate my payment if my income changes every month?
You have two safe options: pay 25% of last year’s total tax each quarter (100% if your prior year adjusted gross income was $150,000 or less, 110% if it was higher), or use the annualized income installment method to base each payment on what you actually earned in that period. The annualized method takes more documentation but can lower payments in slower quarters.
I formed an S-corp this year. Does this still apply to me?
It depends how you are paid. Reasonable salary you take as a W-2 employee of your own S-corp already has taxes withheld through payroll. Distributions and any additional profit typically still need to be covered through personal estimated payments, so you likely still owe a piece of this.
Do you work with business owners outside Carlsbad?
Yes. As a small business bookkeeper, tax accountant, and CPA firm based in Carlsbad, we work with business owners throughout San Diego County, including Oceanside, Vista, San Marcos, Encinitas, Escondido, and the city of San Diego.
Want a second set of eyes on your Q3 number?
As the small business bookkeeper, tax accountant, and CPA team many San Diego County owners call before a deadline, we can run your real numbers in about 20 minutes.
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