Do I use 110% of prior-year tax?

Yes if prior-year AGI exceeded $150k (MFJ). Otherwise 100% of prior-year tax applies.

Does safe harbor mean I won’t owe at filing?

Not necessarily. Safe harbor avoids underpayment penalties; you may still owe the balance if your current-year tax is higher.

Does this calculate penalties?

No. It only shows safe harbor thresholds and remaining amount. Use IRS Form 2210 or software for penalty calculations.

What about uneven income?

This uses the standard method. If income is lumpy, consider annualized installment calculations.

Do states have different rules?

Yes. This tool is federal-focused. Check state safe harbor rules separately.

finance calculator

Safe Harbor Tax Calculator

Estimate the minimum tax you need to pay to meet IRS safe harbor rules and avoid underpayment penalties.

Results

Prior-year rule threshold: $13,200
90% of current-year rule: $13,500
Safe harbor amount (lower of rules): $13,200
Remaining to meet safe harbor: $13,200
Suggested quarterly payment: $3,300
Uses 110% prior-year rule? (1=yes, 0=no): 1

How to use this calculator

Enter prior-year total tax and AGI.
Enter projected current-year total tax.
Enter tax paid/withheld so far.
Review the safe harbor amount, remaining needed, and suggested quarterly payment.

Inputs explained

Prior-year tax: Last year’s total tax (Form 1040 line 24).
Prior-year AGI: Determines whether 110% of prior-year tax applies (> $150k AGI).
Projected current-year tax: Your estimate of this year’s total tax (for the 90% rule).
Payments made: Include withholding and estimated payments already paid this year.

How it works

Safe harbor = the lower of (a) prior-year tax (×110% if prior-year AGI > $150k) and (b) 90% of projected current-year tax.

Remaining = Safe harbor − payments/withholding to date. Quarterly suggestion splits remaining into four equal payments.

Formula

Prior-year rule = Prior-year tax × (1.0 or 1.1 if AGI > $150k)
90% rule = Projected current tax × 90%
Safe harbor = min(Prior-year rule, 90% rule)
Remaining = Safe harbor − Payments made
Quarterly = Remaining ÷ 4

When to use it

Planning estimated payments to avoid underpayment penalties.
Deciding how much extra withholding to add for year-end paychecks.
Checking if you already meet safe harbor with prior-year rule.

Tips & cautions

If your prior-year AGI exceeded $150k, the prior-year rule uses 110% of last year’s tax.
Safe harbor protects from penalties but not from paying the balance due; you may still owe more at filing if current-year tax is higher.
If income is uneven, consider IRS annualized payment methods for more accurate quarterly amounts.
Simplified: does not compute actual penalties or annualized income installments.
Assumes federal rules; state safe harbors differ.
Does not adjust the $150k AGI threshold for filing status nuances.

Worked examples

Prior tax $12k, AGI $140k, current tax $15k, paid $0

Prior-year rule = $12k
90% current = $13.5k
Safe harbor = $12k; Remaining $12k; Quarterly $3k

Prior tax $20k, AGI $200k, current tax $24k, paid $6k

Prior-year rule = $20k × 110% = $22k
90% current = $21.6k
Safe harbor = $21.6k; Remaining = $15.6k; Quarterly ≈ $3.9k

Deep dive

Calculate the safe harbor tax amount to avoid IRS underpayment penalties using prior-year and 90%-of-current rules.

Enter prior-year tax/AGI, projected current tax, and payments made to see the remaining and suggested quarterly payment.

FAQs

Do I use 110% of prior-year tax?: Yes if prior-year AGI exceeded $150k (MFJ). Otherwise 100% of prior-year tax applies.
Does safe harbor mean I won’t owe at filing?: Not necessarily. Safe harbor avoids underpayment penalties; you may still owe the balance if your current-year tax is higher.
Does this calculate penalties?: No. It only shows safe harbor thresholds and remaining amount. Use IRS Form 2210 or software for penalty calculations.
What about uneven income?: This uses the standard method. If income is lumpy, consider annualized installment calculations.
Do states have different rules?: Yes. This tool is federal-focused. Check state safe harbor rules separately.

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Informational only. Not tax advice. Does not compute penalties or annualized income installments. Confirm with a tax professional for your situation.