One of the common problems I face helping people with there taxes is helping them get their withholding correct so they don't end up owning the IRS at the end of the year. So how can you fine-tune your withholding and estimated tax payments for 2026?
The IRS now has a withholding estimator on its website to help you figure out whether you are having the right amount of federal income tax withheld from wages, pensions, IRS distributions, etc. This tool asks about various sources of income, gives tips on credits and deductions, and estimates how much withholding to request.
You can give then give your employer a new W-4 form to have more tax withheld from wages, if need be. People who are receiving pension or annuity payments can submit Form W-4P. IRA owners use Form W-4R, and Social Security recipients fill out Form W-4V.
If you have income not subject to withholding (like dividend, interest or capital gains) it it your responsibility to do Estimated Tax Payments, so the estimator can help you with that also.
Estimated tax payments are usually made in four equal installments, although you may choose two or three payments during the year. The important thing is not make the entire payment in the fourth quarter as that may subject you to a penalty since the tax code is a pay as you earn system.
The first remittance for 2026 is due April 15. The other dates generally are June 15, Sept. 15 and Jan. 15, 2027. (Victims of federally declared disasters usually have more time.) There are several ways to make estimated tax payments. If you have an online account set up with IRS, you can log in and pay through your account (best way). You can also pay online with IRS Direct Pay or the Treasury Dept.’s Electronic Federal Tax Payment System. You can use your phone to pay with IRS’s app. Maybe you want to pay by debit or credit card (additional charges for third payment processor). Payment by paper check is also accepted for now, but this option will soon disappear as the IRS is phasing this option out for both payments and refunds.
It is important to get your withholding or estimated payments correct, because you may be subject to a small penalty if it is not done correctly.