Q2 Estimated Taxes Are Due June 15 — Don't Overpay Under the New 2026 Rules

Why Q2 Matters More This Year

Q2 is the first estimated tax payment under the new OBBBA rules. Q1 was due April 15, before most owners had a clear read on how the law changed their numbers. Now you have time to actually do the math.

There are three reasons this Q2 is different from any other Q2 in the past five years:

• The law is new. Most of the 2025 rules from OBBBA apply for the full year of 2026. Last year's tax software calculated your 2025 estimated payments using a hybrid set of rules. Now it is all new.
• Withholding tables are behind. Many payroll systems are still using older withholding logic. If you take a salary, your paycheck withholding may be off — in either direction.
• Q1 data tells the truth. By May, you have three months of real numbers. That is a far better forecast than a January plan.

The owners who recalibrate in May save real money. The ones who copy last year's payment usually do not realize the cost until April of next year.

What Changed for 2026

Here are the OBBBA changes that most affect a business owner's estimated tax math.

SALT Cap Jumped From $10,000 to $40,000

The state and local tax deduction cap is now $40,000 for 2026. It will rise by 1% per year through 2029. For owners in high-tax states like California, New York, New Jersey, or Illinois, this can change your federal taxable income by tens of thousands of dollars.

If you have been paying state income tax through a pass-through entity (PTET) workaround, you should still review whether that strategy makes sense at the new cap. Many owners no longer need it.

Section 179 Doubled to $2.56 Million

If you plan to buy equipment, vehicles, or software this year, the Section 179 deduction limit is now $2.56 million — up from $1.25 million. That gives you a much bigger window to fully deduct major purchases in the year you put them into service.

For a closer look at the difference between Section 179 and bonus depreciation, see our guide on Section 179 vs. bonus depreciation.

New and Expanded Deductions

OBBBA introduced or expanded several deductions that affect estimated tax payments:

• An expanded Qualified Business Income (QBI) deduction for many pass-through owners
• Higher contribution limits for retirement plans
• Updated deduction rules for vehicles and tip income in qualifying trades

Each of these can lower your taxable income for 2026. If you do not adjust your estimated payments to account for them, you are essentially loaning the IRS money interest-free.

The Two Safe Harbor Rules

If you want to avoid an underpayment penalty, you have two ways to get there. Hit either one and you are protected, even if you owe more on April 15 of next year.

The prior-year safe harbor is the simpler one. It is a fixed number based on your 2025 return, divided by four. If your income is rising in 2026, hitting prior-year safe harbor avoids penalties even if you owe a big balance in April. If your income is falling, current-year safe harbor lets you pay less.

How to Recalculate Your Q2 Payment in 30 Minutes

You do not need to be a tax expert to do this. You need clean Q1 books, last year's tax return, and a calculator. Here is the process:

1. Pull your Q1 actual numbers. Net income through March 31. If your books are not closed, do that first.
2. Project your full-year income. The simplest version: take Q1 net income, multiply by 4. Adjust for any seasonality you know about.
3. Apply the new deductions. Subtract the SALT deduction (up to $40K), QBI deduction (if eligible), retirement contributions, and any Section 179 you plan to use this year.
4. Calculate estimated tax owed. Use last year's effective tax rate as a starting point. Your CPA or tax software can refine it.
5. Subtract Q1 payment. Whatever you sent in on April 15 reduces what is left.
6. Divide remaining tax by 3. That gives you Q2, Q3, and Q4 payments. Send Q2 by June 15.

If the math is too rough to trust, default to prior-year safe harbor. Pay 25% of last year's tax (or 27.5% if your AGI was over $150K) for Q2 and you are protected. You can refine in Q3 once you have more data.

Common Q2 Mistakes

A few mistakes show up year after year. Q2 is the easiest place to catch them.

• Forgetting Q2 only covers two months. Federal estimates are not evenly spaced. Q1 covers January through March. Q2 covers only April and May. Q3 covers June through August. Q4 covers September through December.
• Ignoring state estimated taxes. Many states have their own deadline and their own rules. Don't assume your state matches the federal calendar.
• Forgetting to account for new deductions. If you ignore the bigger SALT cap or the higher Section 179 limit, you will overpay all year.
• Paying through the wrong account. If you have an S-Corp or LLC, your estimated tax is paid by you personally — not by the business. Pay it from a personal account or treat it as an owner draw.
• Missing the deadline. The IRS charges interest on missed payments. The interest rate is currently around 8% per year. Set a reminder.

For more on the mistakes that show up at tax time, see our guide on tax time bookkeeping mistakes.

When to Adjust Withholding Instead

If you take a salary from your business (S-Corp owners, in particular), you may not need to send a separate estimated tax payment at all. You can adjust your W-2 withholding to cover your full tax bill.

Here is when that makes sense:

• You are an S-Corp owner taking a regular paycheck.
• You forgot to make your Q1 estimated payment. A higher withholding rate for the rest of the year can fix the shortfall, because withholding is treated as paid evenly across the year.
• You hate writing four checks a year. Withholding is automatic. Estimated payments require you to remember a deadline.

Talk to your payroll provider or your CPA about updating your W-4 if any of these fit. With the OBBBA changes, this is a good time to review your withholding either way.

What Happens If You Underpay

If you owe more than $1,000 at the end of the year and you did not hit either safe harbor, the IRS charges an underpayment penalty. The penalty is interest on the missed amount, calculated for each quarter you were short.

Right now, the IRS interest rate is around 8% per year. That is more than most savings accounts pay. So a $20,000 underpayment costs roughly $1,600 in penalty for the year.

The penalty is not the end of the world. But it is a hidden cost. And it is fully avoidable with 30 minutes of math.

The Q2 Action Plan

Here is the simple version, in order:

1. Close your Q1 books, if they are not already closed.
2. Pull last year's tax return and your Q1 actuals.
3. Decide which safe harbor you want to hit.
4. Calculate your Q2 payment using the rules above.
5. Send the payment by Monday, June 15, 2026.
6. Block time on your calendar for a Q3 tax projection in September.

For the full year-round tax planning playbook, see our year-round tax calendar every business owner needs. And if you want to know whether your CPA is actually planning your taxes or just filing them, our guide on CPA planning vs. filing walks through the difference.

Q2 is the first chance you have to actually use the new 2026 rules. Don't miss it.

Frequently Asked Questions