The 1040-ES uses your numbers of which the IRS will come by next tax filing. That includes 1099 stuff. If you’re within your safe harbor you don’t need to pay estimated taxes, even if a billion dollars falls into your lap during the year. If you don’t believe what the 1090-ES is telling you call the IRS.We are trying to figure out if we need to make estimated quarterly tax payments. We are newly retired and just starting to take IRA distributions.
In 2025, one of us was employed and covering living expenses. We underpaid the federal tax bill and had a $130 penalty. Does the penalty automatically require quarterly taxes filings?
In 2026 we are both retired and are taking monthly distributions from our tax-deferred IRA that are slightly below last year’s income (when one of us was employed). Fidelity is withholding 20% federal taxes on each distribution. Our state (MI) does not tax these distributions as of 2026.
We completed the 1040-ES projecting for 2026 to calculate estimated quarterly taxes. The Fidelity withholding puts us significantly above our safe harbor of 110%.
Does this mean we do not need to file estimated quarterly taxes?
It’s a bit unclear to us when and how the IRS knows taxes on these distributions have been withheld. Thank you for any input.
Statistics: Posted by tetractys — Sun Feb 08, 2026 2:33 pm — Replies 12 — Views 587