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This post is an extension of Rick’s and Richard’s recent posts regarding taxes in retirement.
A recurring issue I dealt with as a tax preparer was calculating a (unpleasant) surprise the first year that someone retired. While working, the employee typically gets a paycheck with adequate tax withholding. When he leaves the job behind for the greener pastures of retired life, things can get a little more complicated. Now, instead of a single W2 to deal with, there may be forms from Social Security, pension(s), IRA distribution(s), and if they’re unlucky enough to have a commission hungry financial rep, multiple forms from annuities and K1s. If married, the forms may double in number. It was also very common for people not to realize some of their SS could be taxable.
So this is a cautionary post for those approaching retirement. Schedule an appointment with your tax preparer, or if you are a DIYer, use one of the tax calculators, or prepare a dummy tax return on your software in order to calculate your approximate tax liability.
Especially if there are lots of 1099s, I find it easier to not do any withholding, and instead arrange quarterly estimates for both federal and state taxes. I put these on autopilot (direct debits) from my checking, though many people prefer doing it the old fashioned way, by writing checks and mailing them in each quarter.
Good thoughts in your article Dan.
My preference to make estimated payments is using IRS Direct Pay. No IRS personal account, no login, immediate online confirmation of the payment and amount is drafted from my bank account. Typically all the information you need to use IRS Direct Pay is found on your immediate prior year 1040 tax return assuming you have already filed the immediate prior year return (if not filed then you can typically use the year last filed).
As for the amount of the current year estimated payments I like to use the prior year tax safe harbor amount which is 100% of your prior year tax (or 110% if your prior year adjusted gross income was $150K or more) paid in equal quarterly payments.
If my needed current year tax payments are small I have just paid the entire year estimated taxes in the first quarter. If I am making quarterly safe harbor estimated tax payments I will project my current tax late in the current year and play the game of how close to zero tax will I owe when I file my return by adjusting the final quarterly payment but I usually do not pay less than the safe harbor amounts in a timely manner.
As you know the 2026 third quarter ES payment is due 9/15/2026 is less than a month away.
I would also note for those who insist in mailing estimated payments the postal service postmark dating has changed in 2026.
The IRS “timely mailed, timely filed” mailbox rule itself has not changed under the law, but a U.S. Postal Service (USPS) rule update means machine postmarks now reflect when mail is first processed at a regional sorting facility rather than when it was deposited, risking delayed postmark dates for paper tax filings.
Even before the USPS change if the IRS did not deposit your check by the due date you often have a argument you do not want with the IRS computer and if the check is lost then your certified mail return receipt only proves that you mailed something to the IRS, not necessarily a check. I try hard to not mail any checks, I just have seen to many things go wrong.
I hope my thoughts help.
Bill