A
AcadiFi
NE
NewScheduleCOwner2026-05-18
eaPart 1Estimated TaxSchedule C

What should I do if I missed estimated tax payments in my first year as a sole proprietor?

I left a salary job, started a profitable business, and only later realized I was supposed to make quarterly payments. Does sending money now fix everything, or am I already stuck with a penalty?

38 upvotes
Verified ExpertVerified Expert
AcadiFi Certified Professional

Sending money now helps, but it does not turn a missed earlier installment into an on-time payment.

Think about the problem in two parts:

  1. What should be paid now to reduce additional exposure?
  2. What part of the year is already late for installment purposes?

Suppose Juniper Field Services earned far more than expected and the owner made no first-half estimated payments. A catch-up payment in September can reduce future exposure, but it may not fully erase the earlier shortfall because estimated tax is tested by installment period.

That means the best next step is usually:

  • project the full-year tax
  • compare it with prior-year safe-harbor options
  • make an immediate payment
  • document the payment dates clearly for the eventual penalty computation

The exam does not usually reward vague advice like "just pay everything now." It rewards knowing that timing still matters.

🏛️

Master Part 1 with our EA Course

195 lessons · 180+ hours· Expert instruction

#ea#sole-proprietor#estimated-tax#schedule-c#underpayment-penalty