IRC §6654 · 26 U.S.C. §6654
IRC §6654: Failure to Pay Estimated Tax
IRC §6654 penalizes underpayment of estimated tax — the pay-as-you-go enforcement behind quarterly estimates. Three safe harbors avoid it: 90% of current year, 100% of prior year (110% at higher incomes), or owing under $1,000 after withholding.
What it governs
- Quarterly due dates: April, June, September, January
- Withholding treated as paid evenly whenever taken
- Annualized-income method for uneven earners
- Special timing rules for farmers and fishermen
In the GuideFull treatment in Chapter 6 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).
From the practiceDodging the underpayment penalty →
Questions this section answers
- Does withholding really count as paid evenly?
- Yes — whenever taken during the year. A December withholding bump can cure underpaid early quarters.
- What if my income is seasonal?
- The annualized-income method matches payments to when income actually arrived — built for lumpy earners.
- What's the easiest safe harbor?
- Prior-year tax: 100%, or 110% over $150,000 AGI. A known number, no forecasting, penalty-proof if paid evenly.
The whole Code, one volume.
The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
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The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299