The third-quarter instalment of your 2026 US tax is due on 15 September 2026. **Estimated tax payments for Americans abroad** run on exactly the same calendar as they do for Americans at home — 15 April, 15 June, 15 September and 15 January — and the automatic two-month filing extension that expats enjoy does not move a single one of those dates. You must make estimated payments if you expect to owe $1,000 or more after credits and withholding. If you underpay, the IRS charges interest on the shortfall at the rate for each quarter: 7% for the quarter beginning 1 July 2026, compounded daily. Two safe harbours make the whole problem disappear, and most expats can satisfy one of them by reference to last year's return without forecasting anything.
The four dates, and why they surprise people
The 2026 instalments are due 15 April 2026, 15 June 2026, 15 September 2026 and 15 January 2027. Note that these quarters are not equal: the first covers three months, the second covers two, the third covers three, and the fourth covers four. That asymmetry is a legacy of the statute rather than a logic anyone would design today, and it means the June payment arrives uncomfortably soon after the April one.
The surprise for expats is that the automatic extension to 15 June for filing does nothing for payment. Americans living abroad get an automatic two-month extension to file their Form 1040 without requesting it, and a further extension to 15 October on request. But the IRS is explicit that tax owed is still due on the original April date, and interest accrues from then. The extension extends the paperwork, not the money.
The second surprise is that the June estimated payment and the extended filing deadline fall on the same day. An expat who files on 15 June and discovers a balance due for the prior year is often also on the hook, that same afternoon, for the second instalment of the current year. Budgeting for one and not the other is one of the most common cashflow errors we see.
Do estimated tax payments for Americans abroad actually apply to you?
You must make estimated payments if you expect to owe at least $1,000 in tax for the year after subtracting withholding and refundable credits, and if your withholding and credits will be less than the smaller of 90% of this year's tax or 100% of last year's tax.
That second condition is the one worth reading twice, because it is the escape hatch. If your withholding alone already covers 100% of what you owed last year, you owe no estimated payments at all — no matter how much your income has grown this year.
For many Americans abroad the $1,000 test is never met in the first place. If the Foreign Earned Income Exclusion, the Foreign Tax Credit and the standard deduction between them reduce your expected US liability below $1,000, there is nothing to pay. Someone earning a UK salary taxed at 40% will usually generate foreign tax credits far in excess of their US liability, and their estimated tax obligation is simply nil. The IRS guidance on estimated taxes sets out the thresholds in full.
The two safe harbours — the most useful rule in this article
You avoid the underpayment penalty entirely if you pay, through withholding and timely instalments, either 90% of your current-year tax or 100% of your prior-year tax. If your prior-year adjusted gross income exceeded $150,000 — or $75,000 if married filing separately — the prior-year safe harbour rises to 110% of last year's tax.
The prior-year safe harbour is enormously valuable because it requires no forecasting. Last year's tax is a known number sitting on a filed return. Divide it by four, pay that on each date, and the penalty cannot arise regardless of what this year turns out to look like. You may still owe a large balance the following April, but you will owe no interest on it.
For high-earning Americans in the UK, the 110% figure is usually the operative one, because prior-year AGI is computed before the Foreign Earned Income Exclusion is applied in the way most people imagine. Assume 110% unless you have specifically confirmed otherwise.
The current-year 90% safe harbour matters in the opposite situation — a year when income has fallen sharply. Paying 110% of a large prior year when this year will be half the size is a substantial and unnecessary loan to the Treasury, recoverable only on refund and only at the overpayment rate.
What the penalty actually costs in 2026
The estimated tax penalty is not a flat fine. It is interest, charged separately on each instalment for the period it was late, at the underpayment rate set quarterly under section 6621.
For 2026 those rates have moved. The rate for individual underpayments was 7% for the quarter beginning 1 January 2026, fell to 6% for the quarter beginning 1 April 2026, and rose back to 7% for the quarter beginning 1 July 2026. The IRS publishes the full history on its quarterly interest rates page. Interest compounds daily.
In practice the amounts are modest for a single missed instalment and meaningful when the pattern repeats. Underpay the September instalment by $20,000 and leave it unpaid until you file the following April, and at roughly 7% annualised over about seven months the interest is in the region of $800. Do that on all four instalments across two years and it becomes real money — and, unlike a penalty, it is not abatable for reasonable cause.
You can model your own exposure with our US underpayment penalty calculator, which applies the actual quarterly rates rather than a single annual approximation.
Form 2210 and when you have to file it
Form 2210 is where the underpayment penalty is computed. Most taxpayers never touch it — you can simply let the IRS calculate the penalty and bill you, which is usually the least effortful route and produces the same answer.
You do need to file it in several situations. If you are requesting a waiver, if you are using the annualised income instalment method, if your withholding was not evenly distributed across the year and you want it treated by actual date, or if you are treating withholding as paid when it was actually withheld rather than in equal quarters, Form 2210 has to be completed.
The waiver grounds are narrow. The IRS will waive the penalty where the underpayment resulted from a casualty, disaster or other unusual circumstance making the penalty inequitable, or where you retired after reaching age 62 or became disabled in the current or prior tax year and the underpayment was due to reasonable cause. 'I did not realise the June deadline existed' is not on the list.
The annualised income method — for lumpy expat income
The default assumption is that you earned your income evenly across the year, so each instalment should be a quarter of the total. Many Americans abroad do not earn that way at all.
Consider a consultant in London whose income arrives in two large project payments in October and November, or an executive whose restricted stock vests in a single tranche in Q4, or a business owner who takes a dividend in December. Under the default rule, they are treated as having underpaid the April, June and September instalments even though the income had not yet arrived.
The annualised income instalment method, computed in Schedule AI of Form 2210, fixes this. It recalculates each required instalment based on income actually received by that point in the year. It is more work, and it requires clean quarterly records, but for genuinely back-loaded income it can eliminate the penalty entirely rather than merely reduce it.
If your income is concentrated in the second half of the year — and for people with vesting equity it very often is — this method is worth the effort. Our guide to cross-border RSUs and stock options explains why equity income in particular tends to break the even-quarters assumption.
The withholding trick nobody uses
There is an asymmetry in the rules worth knowing. Estimated tax payments are credited on the date you make them. Withholding, by contrast, is treated as paid evenly throughout the year no matter when it was actually withheld.
This means a payment withheld in December can retroactively cure an April underpayment. If you reach November and realise you have underpaid all year, increasing withholding on a year-end bonus, a pension distribution or an IRA withdrawal is materially better than making a large fourth-quarter estimated payment of the same size — the estimated payment only counts from January, whereas the withholding is spread back across all four quarters.
For Americans abroad this is less often available, because foreign employers do not withhold US tax. But anyone with a US pension, a US brokerage account making distributions, or a US employer for part of the year has this lever, and it is the single most effective late-year fix in the toolkit.
How the FEIE and Foreign Tax Credit change the calculation
Both reduce the tax you are estimating, but they behave differently across the year, and the difference matters.
The Foreign Earned Income Exclusion excludes up to $130,000 of foreign earned income for the 2025 tax year, rising to $132,900 for 2026. It is reliable and easy to project. If your foreign earned income is comfortably below the ceiling and you have no other US-taxable income, your estimated liability may genuinely be nil.
The Foreign Tax Credit is less predictable in-year, because it depends on foreign tax actually paid or accrued, and on the sourcing and basketing of that income. A UK taxpayer whose UK liability is settled through PAYE across the year has a smooth accrual; someone paying UK tax through Self Assessment instalments in January and July does not.
The most common expat error here is projecting a full year of foreign tax credits, concluding that no estimated payments are needed, and then discovering that a US-source capital gain, a PFIC distribution or self-employment tax sits entirely outside the credit. Self-employment tax in particular is not reduced by the FEIE at all — you can exclude every dollar of foreign earned income from income tax and still owe 15.3% self-employment tax on the same money, which is very often the entire reason an expat owes estimates.
Self-employment tax: the quiet driver of expat estimates
If you are self-employed abroad and not covered by a totalisation agreement, self-employment tax is usually what pushes you over the $1,000 threshold and into the estimated payment regime.
The FEIE excludes foreign earned income from income tax. It does not touch self-employment tax. Nor does the Foreign Tax Credit, which offsets income tax only. A freelancer in London with $120,000 of profit may owe no US income tax whatsoever and still owe roughly $17,000 of self-employment tax — payable in quarterly instalments.
The escape is the US/UK totalisation agreement. If you are paying UK National Insurance on the same earnings and hold a certificate of coverage, you are exempt from US self-employment tax on that income. Without the certificate, you are exposed. We set out how the agreement works and how to obtain the certificate in our guide to self-employed Americans in the UK and totalisation.
How to pay from abroad
- IRS Direct Pay is free and works from a US bank account. It is the simplest route if you have retained one.
- EFTPS requires enrolment with a mailed PIN, which is slow to set up from overseas but reliable once running. Enrol well before you need it.
- Debit or credit card through an approved processor works from a foreign card but carries a processing fee, typically just under 2% for credit.
- International wire via Form 1040-ES with a foreign bank is possible but slow, and the payment must be correctly designated to the right year and quarter or it will be misapplied.
- Always designate the tax year and the instalment. A payment credited to the wrong year is the most common cause of a penalty notice that should never have been issued.
A practical approach for the September instalment
With 15 September approaching, the pragmatic sequence is short. First, pull last year's Form 1040 and find the total tax line. Multiply by 110% if your prior-year AGI was above $150,000, or 100% if not. Divide by four. That is your safe-harbour instalment.
Second, add up what you have already paid across the April and June instalments plus any withholding. If you are behind, the September payment should make up the shortfall as well as covering its own quarter — catching up in September is far cheaper than catching up in January, because interest stops accruing on the amount from the day you pay it.
Third, if this year is materially worse than last year, run the 90% current-year test instead and pay the lower figure. Use our US estimated tax calculator to work the numbers both ways and pay whichever is smaller.
And if you are behind on filing rather than merely on paying, deal with that first. Estimated payments on an unfiled year are a secondary problem; our guide to US tax extensions for expats covers the filing side.
Where we fit
Estimated tax is one of the few areas of US expat compliance where a small amount of arithmetic in July reliably saves money in April. The safe harbours are generous, the calculation is mechanical, and almost every penalty we see could have been avoided by someone dividing last year's tax by four.
TaxStone handles both sides of the Atlantic — the UK payments on account and the US instalments — which matters because the two systems interact through the foreign tax credit and neither accountant working alone can see the whole picture. If you would like your 2026 instalments reviewed before 15 September, get in touch and we will check your safe-harbour position against last year's return.
Nothing here is a substitute for advice on your own facts, and no figure in this article should be relied on without checking it against the current IRS position for your tax year.
