The second estimated-tax installment was due June 15. For most clients on quarterly payments, that payment went out on autopilot, sized off a number someone set back in April. That is the problem. A mid-year estimated tax check is the cleanest point in the calendar to catch it, because OBBBA reset the inputs that drive the math and a lot of clients are still running on stale safe-harbor assumptions.
The One Big Beautiful Bill Act made the individual rates permanent, reshaped the QBI deduction, and created new deductions for tips and overtime. Those changes hit both halves of the estimate: what the client owes for 2026, and what they have already paid in. With two quarters of real data behind you, and 2025 returns filed for most clients, you have what you need to true up before the Q3 payment is due September 15.
Here is how to run it.
Start with what did not change. The safe-harbor rules under section 6654 are exactly where they were. Pay 90% of the current-year tax, or 100% of the prior-year tax (110% if the prior year's AGI topped $150,000, or $75,000 for a client married filing separately), and there is no underpayment penalty. OBBBA left that framework alone.
What moved is everything feeding it.
On the liability side, OBBBA's 2025-effective provisions already pulled many clients' 2025 tax down: the larger SALT cap, the retroactive tips and overtime deductions, the senior deduction. So the prior-year figure that anchors the safe harbor is often lower than the placeholder a Q1 estimate was built on, especially if that estimate leaned on 2024.
On the payment side, withholding shifted. The IRS did not update the 2025 withholding tables for OBBBA, so 2025 withholding generally did not reflect the new deductions and left many W-2 earners over-withheld. The 2026 tables and Form W-4 were updated for OBBBA, so withholding may be lower for affected employees, especially if they submit an updated W-4 reflecting expected deductions. Existing W-4 elections, wages, payroll systems, and deductions still control the actual amount withheld.
Two quarters in, you can finally see both sides clearly.
Sources: IRS, One Big Beautiful Bill provisions for individuals and workers; QBI threshold figures from Rev. Proc. 2025-32.
One distinction is worth holding onto, because clients get it wrong. Qualified tips and overtime are deductions, not exclusions. The wages still appear on the W-2, still run through FICA, and still sit in AGI. Both are below-the-line deductions on Schedule 1-A: they reduce taxable income and the tax owed, but they do not reduce AGI. So they lower the figure that drives the 90% current-year test, while leaving the AGI that decides whether the prior-year floor is 100% or 110% untouched. A high earner with a large overtime deduction is still on the 110% track.
Six steps, per client:
For clients whose income is lumpy or back-loaded, do not default to four equal payments. The annualized income installment method on Form 2210, Schedule AI, ties each required payment to when the income is earned, and it is the tool for reducing a penalty on earlier periods when income arrived unevenly or jumped midyear.
When you are running true-ups across a full book mid-season, the slow part is not the arithmetic. It is pulling the current rule for each provision and confirming the 2026 figures for every client situation. Tools like Marble's Intelligence agent are built for that work: ask a federal or state estimated-tax question in plain English, get citation-backed answers that link straight to the relevant IRC section or IRS guidance, and generate the memo or client email explaining the revised Q3 payment, ready for your review. Get started now.
No. The section 6654 safe harbors are unchanged: 90% of the current-year tax, or 100% of the prior-year tax, rising to 110% when the prior year's AGI exceeded $150,000 ($75,000 for married filing separately). Two conditions still apply: the prior-year return must have covered all 12 months to use that floor, and estimated tax is generally required only when the client expects to owe at least $1,000 after withholding and credits. What changed is the liability that feeds the current-year test and the prior-year figure itself.
No. Both are below-the-line deductions claimed on Schedule 1-A. They reduce taxable income and the income tax owed, but they do not reduce AGI, and the underlying wages still appear on the W-2 and remain subject to FICA. That matters for the 110% prior-year threshold and other AGI-linked items, which these deductions leave alone.
For individuals, the Q3 installment is due September 15, 2026. The federal periods are uneven: the third one runs June 1 through August 31, not a clean three months measured from the due date. Form 1040-ES has the full schedule.
Often, yes. The prior-year floor protects against a penalty no matter how high 2026 income lands, which makes it the safer play for clients on the way up. The trade-off is cash: a materially higher 2026 will leave a balance due at filing. Clients with falling income or large new OBBBA deductions may pay less now by projecting 90% of the actual 2026 liability.
Use the annualized income installment method on Form 2210, Schedule AI. It ties each required payment to when the income was earned, which can reduce or eliminate the penalty for clients who earn most of their money late in the year. It is more work than four equal payments, but it is the right tool for lumpy income.
