If you're making quarterly estimated tax payments in 2026, stop. Recalculate first.
The "One Big Beautiful Bill" changed your tax liability. Your current payment amounts are likely wrong: either too high or too low. Both scenarios cost you money.
What Changed for 2026
The standard deduction jumped significantly:
- Married filing jointly: $32,200 (up from $31,500)
- Single filers: $16,100 (up from $15,750)
- Head of household: $24,150 (up from $23,625)
Additional deductions for taxpayers 65+ or blind: $2,000 for single filers and heads of household, $1,600 per qualifying spouse filing jointly.
The SALT deduction cap quadrupled. Previously capped at $10,000, it now sits at $40,000 for 2025-2026. This limit increases 1% annually through 2029 before reverting to $10,000 in 2030.
The 20% qualified business income deduction became permanent. Phase-in thresholds increased:
- Individual filers: From $50,000 to $75,000
- Joint returns: From $100,000 to $150,000
These changes reduce taxable income. Lower taxable income means lower tax liability. Lower tax liability requires adjusted quarterly payments.
Why This Matters for Small Business Tax Planning
Quarterly estimated tax payments operate on a pay-as-you-go system. The IRS expects you to pay throughout the year, not just at filing time.
Standard due dates:
- Q1: April 15
- Q2: June 15
- Q3: September 15
- Q4: January 15 (following year)
Underpayment triggers penalties. The IRS charges interest on the difference between what you paid and what you owed. Overpayment means the IRS holds your money interest-free until you file your return.
With 2026's reduced tax liability, your old calculation is obsolete. Using 2025's numbers creates one of two problems:
Problem 1: Overpaying
You're essentially giving the government an interest-free loan. That capital could fund operations, hire staff, or generate returns elsewhere.
Problem 2: Underpaying
You'll face underpayment penalties at tax time. These penalties compound quarterly, increasing your total tax bill.
Calculating Your New Payment Amount
Start with your 2026 projected income. Factor in the new standard deduction or your itemized deductions if they exceed it.
For sole proprietors and small business owners, the permanent QBI deduction changes everything. If your income falls within the new phase-in thresholds, you'll deduct 20% of your qualified business income before calculating tax.
Example calculation for a single filer:
Projected 2026 income: $120,000
Minus standard deduction: -$16,100
Minus QBI deduction (20% of $120,000): -$24,000
Taxable income: $79,900
Compare this to 2025 using old thresholds:
Projected 2025 income: $120,000
Minus standard deduction: -$15,750
Minus QBI deduction (with phase-out starting at $50,000): -$20,000 (reduced)
Taxable income: $84,250
The difference: $4,350 in reduced taxable income. At a 22% tax bracket, that's $957 in tax savings annually, or approximately $240 per quarter.
For itemizers in high-tax states, the SALT increase delivers even larger reductions. A taxpayer previously capped at $10,000 who now deducts $30,000 in state and local taxes reduces taxable income by an additional $20,000.
Adjusting for Business Expenses
Tax preparation for small business requires tracking deductible expenses throughout the year. The OBBBA maintained and expanded several business deductions:
Section 179 expensing: Up to $2.5 million for qualifying equipment and property purchases
Bonus depreciation: Restored at 100% for qualifying assets
Interest expense deductions: Expanded calculation methods
These deductions reduce your taxable business income before applying the QBI deduction, creating a cascading effect on your total tax liability.
If you're planning major equipment purchases or business expansions in 2026, factor these deductions into your quarterly estimates now. Don't wait until year-end to adjust.
Safe Harbor Rules
The IRS provides safe harbor provisions to avoid underpayment penalties:
- Pay 90% of your current year's tax liability
- Pay 100% of your prior year's tax liability (110% if AGI exceeded $150,000)
With 2026's reduced liability, option 1 becomes more attractive. However, if you're uncertain about final income, option 2 provides guaranteed penalty protection.
For business owners with variable income, safe harbor calculations offer breathing room. You can pay based on last year's known liability while the current year unfolds.
What To Do Right Now
Step 1: Review your 2025 return
Identify your effective tax rate, total deductions, and QBI calculations.
Step 2: Project 2026 income
Estimate gross revenue, business expenses, and major deduction items.
Step 3: Calculate new liability
Apply 2026 standard deductions, SALT limits, and QBI thresholds. Use current tax brackets to determine total liability.
Step 4: Divide by four
Split your annual liability into quarterly payments. Adjust individual quarters if income varies seasonally.
Step 5: Pay by deadline
Submit payments through IRS Direct Pay, EFTPS, or your tax professional. Don't miss the April 15 deadline for Q1.
When To Get Professional Help
Complex situations require professional small business tax planning:
- Multi-state operations affected by varying SALT calculations
- Partnership or S-corp pass-through income
- Significant capital gains or losses
- First year as self-employed
- Income fluctuations exceeding 25% quarterly
MCG Service specializes in quarterly tax preparation for small businesses navigating 2026's changes. We calculate your payments, track deadlines, and adjust as your business evolves throughout the year.
The Bottom Line
The 2026 tax changes reduced liability for most taxpayers. Your quarterly estimated payments should reflect this reduction.
Recalculate now. Adjust your April 15 payment based on new deductions, thresholds, and credits. Monitor throughout the year and adjust subsequent quarters as needed.
Accurate quarterly payments protect you from penalties while keeping your capital working for your business instead of sitting with the IRS.
Need help calculating your adjusted payments? Contact our team before the Q1 deadline.