HAUPPAUGE, N.Y., August 7, 2026 – Heritage Accountants & Advisors, income tax provision experts in Long Island, is calling attention to the September 15 federal estimated tax deadline, the third of four 2026 payment dates, as Long Island business owners, freelancers, and investors without automatic withholding face potential IRS underpayment penalties on unpaid quarterly amounts.

With the first two 2026 deadlines already closed, self-employed individuals, S corporation shareholders, and partnership members are being urged to review their quarterly tax positions before the September 15 cutoff. Underpayment penalties are calculated using the federal short-term interest rate plus 3 percentage points, and they accrue separately for each quarter that falls short.

Who Is Affected and What the IRS Requires

The IRS requires estimated tax payments from anyone who expects to owe at least $1,000 in federal tax after subtracting withholding and refundable credits, and whose withholding covers less than 90% of the current year tax or 100% of the prior year tax.

Those affected include:

• Self-employed individuals and sole proprietors

• Partners in partnerships and S corporation shareholders

• Investors earning dividends, capital gains, or rental income

• Business owners whose income passes through to personal returns

According to the IRS estimated tax guidance, partners are personally responsible for paying estimated taxes on their share of partnership income, since partnerships do not withhold tax from distributions. W-2 employees whose withholding fully covers their liability generally do not need to make estimated payments, though those with significant side income may still owe them.

The Q2 Detail Most Owners Miss

One detail many business owners overlook is that the second estimated tax installment period covers only two months of income (April and May), rather than a full three-month quarter. Owners who assume each payment period covers the same amount of time often underpay Q2 without realizing it until a penalty notice arrives.

How the Safe Harbor Rule Reduces Penalty Risk

The safe harbor rule is the primary tool business owners use to avoid underpayment penalties. It does not eliminate the tax owed. It helps taxpayers avoid an underpayment penalty if the required payment thresholds are met.

Two thresholds qualify for safe harbor protection:

• Pay at least 90% of the current year’s tax liability, or

• Pay 100% of the prior year tax liability (110% if prior year AGI exceeded $150,000)

For many business owners, the prior-year method is simpler because the required payment is based on a tax return that has already been filed. CPA tax preparation services that build this calculation into Q4 planning of the prior year allow owners to enter January with a clear quarterly payment target, removing the need to estimate a moving income figure mid-year.

"Business owners who wait until April to think about their quarterly tax position often find they've already locked in penalties for Q1 and Q2 that no year-end payment can reverse," says Philip Bellissimo, Managing Member of Heritage Accountants & Advisors. "September 15 is the moment to catch up before those penalties compound further."

The IRS also treats withholding more favorably than estimated payments. Withholding is counted as paid evenly across all four quarters, even when withheld only late in the year. This means increasing payroll withholding in Q3 or Q4 can retroactively reduce earlier shortfalls in a way that a late estimated payment cannot.

New York State Adds a Separate Layer

New York State runs its own estimated tax schedule, independent of federal deadlines. New York generally requires quarterly payments when a taxpayer expects to owe more than $300 in state tax after withholding. Business tax preparation for Long Island should include both federal and New York estimated tax requirements, since penalties are assessed separately by each authority.

Tax preparation services in Long Island help business owners coordinate federal and New York estimated tax obligations, reducing the risk of penalties and the administrative burden of managing multiple income streams or entity structures.

About Heritage Accountants & Advisors

Heritage Accountants & Advisors is a boutique CPA firm in Hauppauge, New York, serving closely held businesses across Long Island and the greater New York metro area. Formed through the January 2025 merger of BSB Associates and Ferrera, DeStefano & Caporusso, the firm brings four decades of experience in accounting, tax, and advisory services. Heritage Accountants & Advisors is a member of the AICPA and NYSSCPA.

Media Contact

Philip Bellissimo
Managing Member
201 Moreland Road, Suite 3, Hauppauge, NY 11788
Phone: (631) 543-7700
Email: info@heritage.cpa
Contact page: https://heritage.cpa/contact

Contact Information:

Heritage Accountants & Advisors

201 Moreland Road, Suite 3
Hauppauge, NY 11788
United States

Philip Bellissimo
https://heritage.cpa/