Do I meet IRS safe harbor to avoid underpayment penalties?
Check whether you meet IRS safe harbor rules by comparing current-year tax, withholding, and prior-year tax. The tool evaluates the 90% and 100%/110% thresholds for 2025 or 2026 and shows any shortfall so you can adjust withholding or make estimated payments.
How this calculation works
- Compares current-year projected tax to withholding and estimated payments.
- Checks 90% current-year and 100%/110% prior-year safe harbor thresholds.
- Estimates the remaining amount needed to meet the safest threshold.
Common mistakes and caveats
- Safe harbor thresholds can differ for high-income filers.
- Actual penalties depend on timing of payments throughout the year.
FAQ
Does safe harbor mean I will owe no tax?
No. It only reduces underpayment penalties; you may still owe tax at filing.
TaxGuide Pro provides free state and federal tax calculators for individuals, freelancers, and small businesses.